System of decentralized peer-to-peer private security
This document discusses a koncept of system of decentralized peer-to-peer private security as an alternative to current security services. The goal is to increase security of customers and decrease probability of formation of centralized organization in certain area (monopoly). Document describes, how it is possible to achieve using modern digital technologies, such as. Internet, P2P networks and cryptocurrencies.
Document version: 0.2 (creation 17. 1. 2015, last update 18. 1. 2015)
Examples of current security systems in neighborhood are: police, neighborhood watch, or private security services. The disadvantage of police is it being monopoly, so quality of it's services is low while cost is high. Other alternatives are usable but with risk of them becoming monopoly too. Due to this reason, we are suggesting system, which should decrease this risk.
Suggested system differs from others in not trying to satisfy demand with one service provider. Instead, it creates or distributes financial reward in such way, even ordinary citizen has incentive of becoming security provider. In this case specifically patrolling guard monitoring certain area. Barriers of entry to the market should be minimal, thanks to the system. With this system, customers have advantage of being able to order security services individually, so collective consensus or decision of majority aren't necessary.
Design of the system
Citizen, which desires to make use of security service of this system ("customer"), installs a hardware (called RCF - random coin fountain) releasing reward in the form of crypto currency on his mailbox or into publicly accessible area of his house. Customers provides reward into system using computer/mobile interface of his cryptocurrency wallet. Reward will attract patrolling guards, which can see opportunities on the map of their mobile application. They receive reward by going to the place (and checking it) and pair their mobile device with RCF (e.g. via NFC, Bluetooth, IRDA, QR codes). Based on lottery with given probability, part of the reward is released.
The odds of receiving the reward increase with frequency of attempts. Thanks to it, they are motivated to return at such place many times without need for big amount of transactions, wasting money on transaction fees. Place would be visited by many different patrolling guards, because they have odds of receiving reward in case, it wasn't released yet. Patrolling guard which didn't receive reward would have to try again later.
Patrolling guards find out how much which customer pays by testing particular places and they will visit more lucrative customers more often. Thanks to randomness and reputation (see. below) it won't be easy for newcomer to find out level of protection of particular places. That should repel thieves from attempts to abuse this system.
Second important component is reputation system of patrolling guards. It ensures inappropriate or unqualified patrolling guards won't be attracted to that place. At the same time, it ensures incentive for patrolling guards to do their jobs right and obtain trust in the view of people in neighborhood. Reputation would directly influence probability of releasing the reward. Reputation is made of three elements – global reputation, reputation of customer and reputation achieved by visiting the place regularly.
Global reputation should be stored in shared decentralized database. Customer can increase or decrease reputation of patrolling guards, which visit his place. Also, he could view profiles of patrolling guards, which could contain references to certificate institutions and show their qualification in different areas. If customer is not satisfied with patrolling guard, he decreases reputation and odds of receiving the reward. Inappropriate patrolling guard thus loses motivation to visit the place
To prove serious interest and confirm his identity, customer does so called proof-of-burn - provably destroys certain amount of cryptocurrency. Thus, creation of big number of identities is mitigated and so is manipulation of reputation from patrolling guards. Customer manifests his interest in using the service, which makes him more trustful for patrolling guards.
System can be extended with "calls for help" - broadcast messages of customers which need protection immediately (e.g. in case of attack or automatically, if security system detects intruder). After the broadcast, the device would significantly increase probability of reward release (maybe to 1) and, if needed, also amount of reward. It would attract patrolling guard to go immediately visit the place and check it (because by not checking he would risk attack of intruder fearing his disclosure). Too many false calls without reward decreases trust in customer and discourages patrolling guards from providing service. Too many false calls with reward drains resources of customer.
Likewise system of movable RCF could be created, which customers would wear (e.g. in form of bracelet). These bracelets wouldn't release high rewards alone to mitigate attacks. Instead, it should release partially signed multisig transaction, of which missing signature would be provided by trusted third party. Bracelet could release small reward too, which isn't economical for attacker, but it would attract random passerby in case, owner is unconscious. Release would cause broadcasting of SOS and attracting professional help.
These concepts need further work to become usable. It is possible to invent other similar ways of service decentralization.
We have designed a system which motivates patrolling guards do their job right and in decentralized manner. Customers choose how much protection they get and from whom they get it thanks to the reputation system. At the same time, it's expensive for customers to manipulate reputation using false identities. Our system also doesn't unnecessarily waste resources on huge amount of micro-transactions and doesn't reveal too much information to potentially dangerous people (thieves).