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This was originally posted in Reddit, so check out also the discussion in there.
There has been a lot of discussion about governance and arbitration due to the emergency freezing of some accounts by BPs. This whole thing is so new that a lot of people don't really understand it, which has caused a lot of FUD and skepticism.
My initial reaction to the EOS governance model was also very skeptical. "Oh shit, this is not going to work and Dan will waste his time trying to build that kind of system!" But over the last year I've completely changed my opinion. I've seen how the procedures and institutions have been designed very thoughtfully. "Damn, this could actually work very well!"
One of the most common reaction has been: "If BPs have the right to freeze accounts, they have the right to do whatever they want!" But that's not how it goes. BPs have the power to make emergency freezing if there is a risk of somebody losing their money or account. This is only temporary action to give time for arbitrators look at the case and decide if there is actually something wrong going on.
When BPs make an emergency freezing, they also open a case against themselves in the arbitration forum to find out whether or not it was the right thing to do. If they have frozen an account without good evidence of emergency, they might be liable for harm that is caused for the account owner.
The person who demands emergency freezing might also end up paying compensation in the case, for example, if the need for freezing was based on fake evidence. Both BPs and arbitrators will take these kind of cases very seriously.
I'd like to hear from anybody who thinks this case of emergency freezing, that we just saw, was really bad for EOS. I have a feeling that most people think the system can be easily gamed and it will cause harm to members of the community. So let's hear some example cases and talk how the system should work and what could go wrong.
Represent a hypothetical case which you think will show how the system will create a bad or unfair outcome.
We can try to correct misunderstandings, and find out if there are holes in the system that can be used by bad actors, so we can fix them before they are used for bad things.