These were reasons another coin didn't want to choose 3rd party:
Choice of Two Party EscrowTo appreciate the value of the two party escrow system and why it is so important for secure, private and middle men free exchange, it is worth considering problems with the traditional approach of using a 3rd party escrow agent.
In a third party escrow system the buyer and seller ask a third trusted party (an escrow agent) to receive payment from the buyer before the item is delivered and to then release the payment to the seller after the item is delivered. If there is a dispute about the quality of the item or whether it was delivered, the third party acts as a mediator and decides whether to send the payment or refund the buyer. Some of the problems with this model include:
- Unless escrow agent receives the item before forwarding it to the buyer and has the expertise to verify the quality of the item, they have no means of fairly mediating a dispute. This problem becomes much worse when services are being exchanged. Proof of package delivery doesn't verify what was delivered or it's quality and photos from the buyer could be of another item, etc.
- Credit cards and centralized marketplaces seem like existence proofs of working escrow agents but they are non-anonymous, do not resolve disputes fairly (as most small merchants can tell you) and are known to break in markets with high fraud potential (e.g. third world countries, porn, etc).
- Untrustworthy escrow agents who may steal escrow, fail to release escrow or collude with (or be) one of the parties.
- Escrow agents with strong reputation may be doing a long con to take off with or extort a large payment or group of payments.
- Escrow agent expenses in the form of labor and risk are passed on to the buyer and seller.
- Finding a trustworthy agent requires a reputation system and building reputation systems in anonymous networks remains an unsolved problem.
Fortunately, two party escrow made possible by (another coin) multi-signature transactions can solve all of these problems.
It does bring up another point I forgot, what if the marketplace owner is also the seller (pretending to be separate parties!) ... hmm that would not be good.
I guess, I just agree with most of those reasons.
I think some of those same things *could*, in different ways, happen also in a 2 party system though.
Just my opinions... I own both coins so whatever turns out to be more popular is fine with me.