Bonding + arbitration + escrow ?

[tvbcof]

I'm thinking of setting up a project which would involve other people's money.  I got to thinking about how to do it in a confidence inspiring way.   Here is what I am thinking (and it is not, I don't believe, a particularly novel construct in the real world...but then I don't hold an MBA...)

 - Money from multiple participants is held in sole control of an escrow agent(*).

 - Parts of the project are commisisioned in conjuction with a bonding agent.  That is, I describe the item to a someone who will carry a bond in case the contracted party fails to perform.  If such a failure occured, the bonding agent would pay the project imediately and then enter into his/her own legal battle with the contractor to re-coup his/her losses.

 - a pre-agreed arbitrator would decide how to resolve any conflict between the organizer (me) the bonding agent, and the escrow agent.  Probably the arbitrator would work on retainder, and recieve a rate in the event their services were required.

My question is whether such a project has been attempted and whether anyone has served as either a bonding agent or arbitrator in such a capacity?

For bonding, I assume that the bonding agent would research the shit out of me and we would sign various legal documents which would hold in a court of law.  And that the bonding agent would do the same thing with any contractors in order to cover his/her ass.

Please don't tell me that such a thing will add cost...that is kind of a no-brainer as observations go.

I looked around a bit and saw mostly this conversation:

  https://bitcointalk.org/index.php?topic=112058.0

which didn't seem to get very far.

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(*) I did not wish to muddy the waters since this is irrelevant to my main question, but I expect that the individual participants in the project (many) would retain control of the funds they input and withdraw support by autonomously withdrawing their funds.  They would also vote on project decisions based on their stake held under control shared with the escrow agent.

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[John (John K.)]

...

My question is whether such a project has been attempted and whether anyone has served as either a bonding agent or arbitrator in such a capacity?

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Not in the Bitcoin commerce world as far as I can tell. I've served as the escrow (duh!) and arbitrator in various transactions though, but I've never heard of the bonding part. Why would that be needed as long as an escrow is used?  (who releases the funds after the requirements and contract are fulfilled, thus negating any need of litigation efforts to retrieve any pre paid monies)

[tvbcof]

Not in the Bitcoin commerce world as far as I can tell. I've served as the escrow (duh!) and arbitrator in various transactions though, but I've never heard of the bonding part. Why would that be needed as long as an escrow is used?  (who releases the funds after the requirements and contract are fulfilled, thus negating any need of litigation efforts to retrieve any pre paid monies)

I actually have several distinct things to run by you so I'll break them into several responses.  And am a bit busy so it might take a few days.  (BTW, are you going to be at the conference?  I've not decided whether to stick around the Bay Area for a few extra days to hit the conference or not.)

I see 'escrow' and 'bonding' as pretty much entirely different things.

An 'escrow agent' does not risk his own money.  Mostly just his reputation.

A 'bond' person puts his own money at risk.  Using a bond provides several distinct things:

 - insurance for effected parties (since a project can move forward without a monetary deficiency in case of a lack of performance on the part of a contractor.)

 - assurance for effected parties (since the bond issuer is doing his own due diligence on various things to protect their own ass.)

An 'arbitrator' provides much better performance than the court system can, and in Bitcoin-land this is especially important since the court system is not geared for crypto-currencies at all even with a terrible time delay.  Of course agreements between the various parties can be structure to leverage the court system and probably would be in important or high-value cases.

I'm having a hard time being clear on this stuff.  It is a little complicated, and my own exposure to it is limited more to academics.  It was interesting that many moons ago when I was involved in the construction business, people used 'the size of their bond' and 'the size of their external genitalia' in a similar manner

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Although it is secondary to my immediate interest, I do hope that a formalize and solid bonding framework happens in Bitcoin-land.  Right now my cold-storage BTC stash sits underutilized in a safe deposit box.  If it could work for me as part of a bond pool, I would consider that a potentially interesting option.