[DennisP]

Yes, there's the standard transaction fee, but on Ethereum that would be about a penny. My point is there'd be no fee to the third party, in the absence of a dispute. In that case the third party would do no work. They don't even have to know about the transactions where they're designated "just in case."

The fee when there is a dispute would have to be higher; I'd argue that this isn't terrible, since it gives the primaries a stronger incentive to work things out on their own.

Obviously it would help to have some kind of reputation system for arbitrators. That doesn't necessarily have to be on chain; anything that lets both primaries agree on an arbitrator is fine.

The contract is what forces the payment; the money in question is held by the contract, and if the arbitrator makes the decision, the contract automatically deducts the fee from the held funds and pays it.

You're right that sometimes people ignore why the current system works, but the flip side is dismissing blockchain solutions without first understanding how they work.