Topic: Are escrow services against Decentralized network? (Read 265 times)

Smart contracts are really not as good as people think they are. You can't sell a house or a car with smart contracts without having trusted third parties, basically your escrows. Smart contracts only really work when you have digital goods on blockchain, like other coins or tokens.

Also, I wouldn't count escrows as centralization, at least not in the same manner as banks are. With banks you have only single third party and no way to avoid it, other than changing your bank, while with escrows you can choose among many people. And you aren't even forced to do it 100% of the time, unlike with banks or some marketplace platforms. If your counterparty has a good reputation and a transaction is small, it's okay to trust.

Yet.  It could take many years and may never be part of the base protocol, but I suspect because of the advantages smart contracts have over escrow, some gifted individual will eventually find a clean way to incorporate that feature into a secondary or tertiary layer built on top of Bitcoin.  As a general rule of thumb, if there's sufficient demand for it, someone will probably try building it.

It's actually possible to create a very decentralized escrow system(if it hasn't been done already). The most important thing is to remove all or most forms of centralization from the system/service, and possibly decentralize the keys or funds. 
You could for example create a simple and efficient decentralized escrow system that involves few arbiters and many anonymous witnesses who make sure the arbiters really follow system rules and settle disbutes properly and according to the agreed terms of service.

Anything we do with BTC will still require some level of trust.

To use Binance, you have to trust their website. To use an ATM, you'd have to trust the code behind it. To verify your identity on some platform, you have to trust the procedure and their words when they say your private information will stay private. To use BTC, you have to trust the coding behind a wallet. If you're not a programmer, like me, you'd have to trust other people understanding programming language because even if you wanted you'd have no idea what the open source code says behind a software unless someone explained it thoroughly. And even then, you'd have to trust them. Same goes for Bisq, OpenBazaar or whatever other open-source platform we use.

You see, while Bitcoin was built to be trustless, unless you make a transaction with someone face-to-face or through some magic script I have no idea how to write (took this from pooya87's reply before mine), you will have to trust something or someone. That does not, however, change the decentralized characteristic of BTC. It's just that some people support decentralized platforms/methods which are more inconvenient while the rest support centralized ones, which are more comfortable. In the end, both people will use BTC the decentralized way (unless they're using exchange or custodial wallets to hold & transfer funds, of course).

The decentralized manner of BTC doesn't change because you are not obliged to use an escrow service, for example, in order to sell something online. If both parties decided to, they could do it without the existence of a third party. Same goes for exchanging BTC. If you search enough in your city for a person who has some BTC, you could convince them to sell you some or to buy some from you if they're interested. If both of you agree, you could do it face-to-face. No third parties involved.

If third parties were mandatory and p2p wasn't a choice, this reply would have looked completely different (obviously).

So nope, BTC's decentralization isn't a thing to worry about. That's unless some governments decide to make any peer-to-peer Bitcoin transactions illegal which would be an abusive and nonsense law.

On the other hand, the fact that they're pushing for more & more regulations scare me a little bit because I never know what to expect. They always push for more invasive laws. But still, for now, nothing to worry about.

well what you say is like saying "when people use coinbase to store their bitcoins it centralizes the network". you see that doesn't make any sense because it has nothing to do with the network since what people choose to do with their coins doesn't change how bitcoin works.

with that said, you still can use escrow in a more decentralized way. the bitcoin scripting language already has options for that with certain OP codes that include OP_CHECKMULTISIG and locktime related OP codes such as OP_CHECKLOCKTIMEVERIFY and conditional OP codes like OP_IF.
remember that at the end of the day bitcoin is a peer to peer currency which means peers (individuals) that interact with each other. it can be 2 peers or multiple ones in a complicated script used in an escrow service.

Escrows are performed in the end because two opposite parties don't trust each other and would like in the simplest sense for someone to act as a middle man. Let's be honest, a middle man is someone that is trusted not by the two parties, but rather a well-known one trusted by a "community". Ofc, you can't really remove the fact that it is a tad dangerous since a humans mind could change in a snap, but still, that's a matter of trust and not really connected about how the cryptocurrency works on a decentralized network. As for anything different from an escrow, idk, maybe smart contracts could work but BTC doesn't really accept that kind of format.

Besides, it's decentralized because others are working to process it for others. It isn't a centralized organization. Escrows are something that is given by the two parties themselves, not a central authority meaning they have the freedom to choose.

Are you saying the same that Bitcoin is used to purchase drugs, guns etc cause some people do that?
You can use multiSig wallet for leaving the escrow part if you want. You can do automated future payment. With ETH, there are smart contracts too although ETH is a proven centralized coin.

It does, that is why we should start realizing that decentralization is not something that would make heaven on earth. Once you equate decentralization with an ideal world, that's the start of you seeing a lot of necessary factors outside of it and be a little disappointed perhaps. More often, decentralization is being presented as if it is a sort of an abracadabra, a silver bullet that addresses all the flaws of society. It is not.


And a transaction without it is much more dangerous.

Trusting a reputable escrow is a world better than trusting outright another stranger.

When we are talking about the practical implications I do think network as a whole does depend on a lot of factors and not just it's mathematical definition.

Therefore when we go around talking about the Bitcoins network it is dependent on the user , on its usage and it is affected by a whole lot of things .

Practical implications are somehow very varied and widespread therefore I do think it is certainly very important to talk about it here .

Plus I do agree with the fact that the third party escrow services are dangerous . At the same time I do believe that no matter what one way or the other the cryptocurrencies can easily be traced by the government since we have to sell it and receive money online in bank accounts 50% of the time. But then again it is a practical implication , one can actually use it as a Currency and go around without any trace .




Plus thank you for actually working up for this and digging up the past post by Mr . Satoshi Nakamoto , it is amazing to see what he could have already imagined at that time , he was a man of the future might have been using the time machine .

No it isn't. Trusting another human being to act as an escrow has exactly zero influence on decentralization or otherwise of the bitcoin network.

We can certainly infer from what he wrote in the past. See the following two posts:
https://bitcointalksearch.org/topic/m.14136
https://bitcointalksearch.org/topic/escrow-750


He seemed to be well aware that human arbitrated escrow was not only likely, but potentially even desirable.

Bisq comes pretty close. Funds are held in a multi-sig escrow that prevents either party from unilaterally accessing them, but allows both parties to agree to release them once the trade is complete.

Does escrow have anything to do with the network? IMO the network remains decentralized. What a user does with their coins does not change how a decentralized network operates.
We could argue that the greatest danger to decentralization is trading on entralized exchanges as it not only gives your private key to someone (who you don't even know, unlike escrow that can be held by someone you know and trust) but also taints your coins with a fiat trace.

For people who are new to Bitcoins and still wants to participate in discussion please allow me to explain escrow services in layman terms:-

Escrow might be taken as a bond which is held by a third party , in case of Bitcoins a trusted third party holds the amount until and unless the conditions are met and then it can be released to the receiver.

I am in no way saying escrow is unimportant .
Let's be honest , no one here knows anything about anyone and therefore it is the single most thing that is keeping the campaigns working.

But at the same time this is making the network a little centralized.

Maybe we can never achieve complete decentralization ? We would always need a third party to make sure people are responsible and doing what needs to be done.

But this is all against the decentralized network that Bitcoins is . Since we do not know what Mr. Satoshi would have to say about it , I do think his plan was ever to achieve complete decentralization ? Since he was intelligent enough to predict the escrow services becoming a huge part of the community in certain sectors.

So I do think :- Bitcoins is a decentralized network but for the processing of Bitcoins as a whole we do need some centralized efforts. Therefore it is not free from the centralized society .

Do you guys think we could in the future have some software that would be able to do escrow services unbiased ,able to make the Bitcoins completely decentralized ? Or is it not needed and you guys are comfortable with it ?

Personally I do not think escrow services on the third party exchange sites are good , they are flawed , if a person is able to generate appropriate documents even though the payment is not complete , or due to some personal errors , one might have to wait for days to actually open a new ticket , get it resolved and then again , there is no way it might come back 100% .