Didn't know the word either a couple months ago, but that cracked me up.
Imagine you want to trade your 1 BTC with someone offering 100 LTC.
Since it looks a bit fishy, you ask him to use escrow.
You both agree on a person you trust. Jonh K is probably the most trustworthy escrow here on this forum.
You send your 1BTC to the escrow.
Someone sends their 100LTC to the same escrow.
Once escrow received both, and it's confirmed, he sends you the 100LTC, and sends someone the 1BTC.
If escrow receives your 1 BTC, and does not receive the 100LTC from someone, he will send back the 1 BTC to you.
The difference is here. If you had sent your 1 BTC to someone first, someone would have never sent it back, if he intended to steal it from you.
