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by brador 4482 days ago
What if the arbitrator is colluding with the loser?
2 comments

This problem is not solved via 2of3 transactions.

It can be partially mitigated by requiring multiple arbitrators (e.g. a 4/5 transaction with 3 hopefluly independent arbitrators).

Unfortunately, there's no really good way of establishing that two pseudonyms are not held by the same person, in a decentralized system. Doubly so when legal enforcement isn't available. Of course abuse is harder the more arbitrators you incorporate, but expense and difficulty are higher as well.
That's a human problem, not a Bitcoin problem.