The rapid evolution of digital technologies has fundamentally disrupted traditional arbitration processes, introducing new complexities and opportunities at the intersection of blockchain technology, smart contracts, and online arbitration. This study examines the legal and practical challenges arising from the integration of blockchain technology, smart contracts, and online arbitration. The research addresses the problem of adapting traditional dispute resolution frameworks to decentralized automated agreements that transcend national borders. Using doctrinal analysis and comparative review of legal sources, case studies, and real-world platforms, the study identifies key types of smart contracts and evaluates on-chain and off-chain arbitration models. Findings highlight both the efficiency and transparency offered by blockchain-based dispute resolution, as well as persistent issues such as jurisdictional uncertainty, enforceability, technical vulnerabilities, and privacy risks. The results underscore the need for clear legal standards, technical safeguards, and the adoption of advanced technologies. The study recommends promoting interoperability, specifying governing law in smart contracts, and leveraging AI and off-chain execution systems to enhance the robustness and adaptability of digital dispute resolution.