Topic: Basic Of Escrow System; Q&A by Satoshi (Read 217 times)

SATOSHI SOLVE A PROBLEM AND LEFT A PROBLEM.
Satoshi say that bitcoin will make a buyer not cheat a seller. If I buy from you and pay you digital money. You will be sure that the money will not reverse back to me. This is a problem bitcoin solve. Traditional institution did not solve it. They need 3rd party.
Satoshi said for seller not to cheat buyer a escrow should be used. Which is to trust a third party. This is a problem to bitcoin decentralization.
Let us get to work and find solution better than escrow.

That is true but escrow is amazing solution it is pitty that many scams discredited such useful things by exit scams etc...
It is important to have 3rd neutral vote and even it is very hard to judge by evidence provided from both sides it is best solution ever because you cant get more justice without trust and not sure if you ever will and trust me I have been scammed so many times and wish I had more power to get justice.
That is why I sticked to 2 of 3 and will make announcement about my service after "How to video" for beginners is done

Definitely there must be a middle man for escrow, if no middle man like I have explained, it will be difficult, there will be some people that will just want to wicked someone. There are some stupid people that will just want to make someone cry and depressed, they can even accept a request that they want to sell but of which having nothing, all they want is to make sure the buyer lose, the buyer will lock the bitcoin in escrow, the fake seller will only be happy the buyer has lost. Someone you know but which its identity not linked can do such a thing to wicked someone. The advantage of 2-of-3 is when seller has sold, the third party will be able to release the bitcoin if the buyer fail to release the coin, while the buyer will not release the coin if the seller do not sell anything. But, it still has disadvantage, if the buyer already have the bitcoin in escrow, while the seller do not sell anything, the coin will still burn in 2-of-3 while the buyer will lose, in this case, the seller can plan with the third party that he is not sending anything, that if he release the bitcoin, that he will give him certain percentage, although, the third party may not release the bitcoin as he know the seller will also scam him, but the buyer already lose as the coin will be burned which makes it not perfect enough.

Yes. I know, I said Satoshi's idea was 2-of-2.

No. Giving a third party that is trusted by both the full control of the coin is far safer than 2-of-2 multisig escrow. It's far more plausible for scammers to hold the coins hostage in this case as they'll have nothing to lose while the escrow is putting his reputation on the line. 2-of-3 could be better provided if the thirdparty is not colluding with either of them, if they are then self escrow would make it as good as a third party holding it.

satoshi explained how escrow can be without any third party, what I think is that what if the seller did not sell after the buyer has put bitcoin on escrow, some people can be so wicked in a way they will manipulate and not sell anything, even if the buyer did not release money from escrow, that means the buyer will lose and the bitcoin will burn out. But there are cases but few where people can be so wicked.mand result to burned bitcoin. But having a central body to make sure both the buyer and the seller did not cheat makes it better, if the seller did not sell anything, the bitcoin will automatically leave escrow when certain period is over and back to buyers account, or in the case someone provide the escrow, he will know who cheats and make sure no one lose, but using reputed escrow service is very important.

Yeah, but it somewhat give the seller some level of confidence seeing the money being put in an escrow.
This was not Satoshi's idea of bitcoin escrow as crypto transactions are not traceable, giving the third party full control right over the escrow fund is still as risky as doing a 2x2 transactions method where one party might choose not to obey the terms of agreements. This is the reason there are fraudulent escrow services offering lower percentages.

satoshi’s view on escrow was a sign of the times back then. Before this community became incredibly toxic, the idea a buyer wouldn’t release payment and would instead choose to burn the BTC out of spite would have been unheard of. Today, his view on escrow is laughed at, and rightfully so as buyers would routinely not be paid for their goods or services if this process model were followed by the community.

All escrow systems need a third party to send the money and in bitcoin the trust moved from one or tow paries to the community and Miners.
The model that Satoshi told is the concept of multi-signatures and some may try to update the thought social recovery wallets

Satoshi didnot modulate bitcointalk

The escrow system that Satoshi mentioned here is not like the escrow system that we have here. Most of the escrow services has the intermediary holding full control of the funds and becoming a mediator in the event that something goes wrong. What Satoshi described was just a rough idea of how P2SH or by extension, Multisig currently works but in a 2-of-2 manner. A correct system would be whereby there is a 2-of-3 multisig where a trusted party holds onto the third key as a mediator if something goes wrong. This is only effective if the third party is trusted by both and also neutral to both of the parties involved in transaction.

Escrow existed before Bitcoin.

The original source is Escrow, not the article in that institute. It mentions the original topic as External link.

Escrow can not protect you. The level of protection depends on the quality of Escrow service. If you use a scam Escrow service, it will steal your bitcoin, not your trade partner.

How much do you know about Escrow system? The word escrow is one of the most used in the forum especially the service board, and most of the crypto newbies don't really know how this works and the mechanism behind the process. Escrow service was introduced to reduce the rate of frausters in the crypto business transactions system, where a third party is introduced to witness a smooth exchange between buyer and a seller.



Escrow processes by Satoshi


Answer by Satoshi


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