Topic: Discussion about escrow service offered by forum users (Read 426 times)

If any forum member offer escrow service and both parties agrees to use that escrow means the user is trustworthy. So they can depend on the escrow and there is almost no issue for that escrow. If anyone offer escrow and face a problem like received fake/spam/scam token to the escrow wallet and then another party release the fund. But while escrow will release and then it may caught as spam/scam/fraud in that case escrow should be liable for that. In this case escrow should bear the loss. if the escrow has not enough fund then the escrow should borrow the amount.

I wouldn't even call that "hacked", it's just phishing: the scammer sends a fake forum link, the user enters his password, and the scammer is in. Even 2FA isn't going to help against it, as the Man In The Middle can still use that to login.
I've been sent to a phishing site once, and when it asked me to enter my password (instead of my browser doing it for me) I knew something was wrong.

One solution against hacked accounts would be to only accept signed messages and ignore anything else, but that's more work.

It's definitely NOT a good practice, you will get burned sooner or later.

I think most people get scammed not because of no multi-sig, but lately more because their forum account is hacked mid-transaction, and then all hell breaks loose ... Case in point:

https://bitcointalksearch.org/topic/helphelp-me-to-get-back-my-money-from-scammer-5367587

Okay, so whoever thought of hiring an escrow pays for it—this clarifies the whole concept. I've never used an escrow because I'm the type of person who places a lot of trust in others. I've had some financial dealings with random internet users without doing much research, and it's always worked out well in the end. I'm not sure if assuming everyone is honest because I'm honest is a good practice.

This where people got scammed entrusting funds to escrow without multi-Sig I believe most escrow users don't know about this.

In collectibles, the buyer always pays the escrow fee.

If I sell someone something, and they want escrow, it's just going to cost them more money and more time. Not to say I don't accept escrow, but generally most people don't request it from me anymore, as trust is earned here and I believe I've more than earned mine.

I don't know of anyone using multi-sig for escrow on the forum for anything, other than forum funds held by thermos & "treasurers"..

about the bL4nkcode case, crwth just confirmed that they did everything completely amateurishly. He finds where the funds should be spent, says to cabalism and he asks from blankcode to send bitcoin. Without any document, or any specification how exactly will cost and time when he will do it all.
So there are no strict rules because everything was based on the fly an agreement through a couple of messages.

When we talk about Bitcointalk escrow (based on the bL4nkcode example, he is not logged in here on the forum, even if he is active on Telegram), someone says escrow is "very little work", is it a good practice not to have escrow appear here for a week? It's a "little work", but that means little is always available here?

Sorry if this appears to be a silly question, but knowledge is power, and I've been meaning to ask this question for a long time but have always forgotten.

Who pays the 1% fee for an escrow service between the buyer and the seller? Or is the money withdrawn automatically from the escrowed amount before it is sent to the seller by the escrow provider?

The Satoshi multi-sig idea of simple escrow service is not longer in use, it is still the best practice since it protects both the buyer and the seller from the escrow provider - at the very least, it prevents the escrow from fleeing with the money.

I'd say an escrow has to ensure both involved parties are safe no matter what, and the escrow has to assume one of them is a scammer while the other is a n00b. Unfortunately, even paying an escrow $500 can't guarantee that. See Best practices for Bitcointalk escrow providers.

In reality, Bitcointalk escrow often offers false security, and can't guarantee safety of funds in all possible scenarios. All goes well as long as all involved parties are honest, but you don't need an escrow for that.
I've seen several (quite sophisticated) attempts in which the false security of an escrow is used to scam someone.

I think it's typically 1% ($500 in the above case), which I think is a lot of money for very little work. It would totally be worth it if real security was offered including a refund for messing up, but clearly that's not the case.

Back to the bL4nkcode case, I'd say he should have applied this:

I think yes. It somehow sounded like an an easy task but you could considered that as services since he is the one handling the funds for its client to put the funds safe and allocated for its purpose smoothly. But as far as I can see they only incurred small fees, some are average well depend on the reputation of someone and his talent fee of course. If youll do the escrow I happily entrusted you even 1 btc without any doubt. As you are a reputated member of this forum. Why ask btw, aside from curiosity? Gonna start one?

I really don't consider an escrow in 2011 the same as an escrow in 2021. The value is totally different. In 2011 I would probably have trusted 1/4th of the forum to escrow(not actually just giving an example), whereas in 2021 I would trust less than 10 people to hold 1btc.

Hope this isn't too far off topic, but this is a thread about escrowing: Do escrows get a fee or a tip for their services usually?

I've never escrowed any deals before, but if it only involves crypto transferring I'd be willing to do it for anyone who would trust me enough to do it.  I'd definitely want a few sats for my efforts if the amounts involved are sufficient to warrant it, as I have heard what you described about occasionally having to resolve disputes and such--plus it is providing a valuable service.  Anyway, if anyone sees this and is interested, PM me.

And Dave, you didn't mention if there are any members on the forum who escrow deals right now.  I might just be missing them, since I have Currency Exchange on ignore.  I can't remember the name of the members who used to do it on the regular back in 2015-16 or so.

More or less yes. It's just holding the funds till whatever is greed upon is delivered.
But, they also get to mediate disputes and occasionally deal with the physical merch at times depending on the deal.
For the most part now, from what I can see it's for newer members with no reputation to have the ability to deal with us older more paranoid people.

-Dave

Yeah, I see your point there--I remarked on this topic in the other thread where the inquisition is going on and didn't consider that aspect. 

But I also think I said that the best escrow would have to be one that already has an established record of not being crooked when acting as an escrow, and the longer the track record the better.  I don't even know who does escrowing these days on the forum.  When I first joined, I used to see it mentioned a lot and there were a few members who were completely trusted to handle large sums of bitcoin or altcoins.

What do you have to do to escrow a deal, just hold the funds until the counterparty says it's OK to release them?  Is it that much of a pain in the ass to be one? 

That would rapidly become a very small and exclusive list for larger deals.
AND then you have the other side of that which is now you know which escrows have access to how much money. And I am sure that a lot of them would not want others to know how much they have the capability of getting access to. Be it 0.001BTC or 100.00BTC

I understand what you are saying, I just do not see a way of making it happen.

-Dave

Let me leave my honest opinion. An escrow should have the capability to handle the situation if something went wrong like lost funds by his mistakes or whatever. On the other hand, trust is quite important as well. An escrow provider must have enough trust & enough financial solvency. But we have to think about the situation as well. Sometimes situation would be bad for an escrow provider as well though he do not intend to rush his trust. An escrow provider should be established financially that he shouldn't sell his soul eventually for money.

Probably.

Obviously an escrow should be wealthy enough to not ever be tempted to compromise his position of trust by abusing it & stealing funds. An escrow here should be an uber trustworthy, somewhat wealthy user.

I would volunteer myself to hold funds & provide escrow but I can’t be bothered with the extra work to be honest.

A 3-of-5 multisig balances the risk of an escrow disappearing and the risk of an escrow stealing. As long as at least 3 people are honest and available, funds are safe. If anyone considers stealing, they'll need to discuss that with someone else, thereby risking exposure.

Not for nothing, but we didn't need a mini-essay on what an escrow service is.  If you don't have an opinion on this matter or are unfamiliar with it, just don't bother with bloated shitposts.

That would be ideal, and I wrote much the same thing in the thread dealing with the charity:

Unfortunately, how many of us know the financial situation of any other member on bitcointalk?  Very few of us know each other in real life, and if someone is offering an escrow service, how is anyone able to determine whether that person is in financial trouble?  They might have a bunch of green trust, they might be on DT, but none of that indicates how well-off they are or if they'd be tempted to scam if they had control of a large amount of funds.  Again, I'll give the example of Master-P who was very trusted but wound up scamming for a lot of money.  You just never know.

That wouldn't guarantee the escrow wouldn't be tempted to double his money, though.  Even if the escrow provided proof that he had 10x what he was escrowing, temptation, the irreversible nature of bitcoin, and the history of scammers not being brought to justice might still be temptation enough.  The fact is that trusted members have scammed before, and people have been scammed for relatively small amounts of bitcoin before.  Those things will no doubt happen again no matter what safeguards are in place.

So yes, an escrow--at a minimum--should be financially well-off but I don't even think that guarantees they wouldn't scam.  I honestly don't know what can be done to ensure the safety of someone's funds with an escrow other than if the escrow has a long track record of successful escrowing, and even then....

No, can't change what has been practiced with, it's still all about the "TRUST".

If someone has the capacity to pay, but will he be able to produce the same amount of the total amount under escrow? or would the escrow be willing to escrow his funds also to ensure payment if something bad happens? I think things would be more complicated and it would be better to look for an escrow company that could ensure the security of funds, if we follow that, it would mean that the contracting party has to pay a bigger service fee which is not viable in most transactions.

I'd argue cabalism13 wasn't the fund owner. If he was the owner, what's the point of using escrow? Adding fake security to donators?
Using escrow implies transactions need the escrow's approval, to make sure funds are spend as intended.

this is interesting now. I don't want to defend anyone, but whether bL4nkcode violated escrow rules in this case?
There is no clear charge that he misused his service, I mean no complaints from funds "owners" (people involved in this charity group). apparently, he was spending money with the approval of cabalism.

Since escrow service is a very sensitive topic, the whole drama excludes him ^bL4nkcode as a trustable user. I think there must be an impeccable reputation, also a user running his escrow service would have to show that he owns the same amount which he will hold as a third party. there is probably less possibility that he will use funds from escrow for grandfather's treatment (just example).

It all depends on how much money you're talking about. Although $400 may appear to be a small sum to you, it is a significant sum in the context of where bL4 came from. Borrowing is done for a variety of reasons, not just because someone is broke or short on cash. Elon and Jeff both have personal debts.

It's not necessary for an escrow provider to be financially stable, but I wouldn't do business with someone who isn't. The question is, how can you be sure that bL4 isn't financially solid?

Looking at his escrow service history, he has had multiple multi-million dollar dealings in the past, and I believe this is why I'm going to oppose the flag against bL4.

There are 2 or 3 separate things here (IMO) so I am going to split them up a bit

As for borrowing money / being an escrow.
I am going to go the other way and say it's not *that* big a deal.
I have borrowed money (from banks or used credit cards never here) for things at times even when I had cash / funds available.
Sometimes it's just timing, sometimes you would rather pay interest then not have the cash / funds on hand and so on.
Heck, I took a loan out for my last bike when, at the time, I had the cash in the bank earning just about nothing because I did not want to move those funds.

From the far away view you can take a look at bL4nkcode and say, oh he can pull in $100 a week in the signature campaign he is in, and is (in theory) only borrowing 1 month of income from that so what's the big deal.

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As for the charity thing, yeah that is a shitshow. But it's a shitshow of our own making. I have lost count, what is this the 3rd or 4th time in recent memory that there has been some group of us here making donations to something that went sideways? Not saying the funds were stolen or not used properly since we don't know for sure but look back at the  Bruno / Phinnaeus Gage / Gleb Gamow fiasco https://bitcointalksearch.org/topic/flag-bruno-aka-phinnaeus-gage-gleb-gamow-yutucoin-bitcoin-100-5251105 there was another one last year but I don't remember the name at the moment. I'm sure there are more that I just did not notice.

We as a group should come up with a set of "guidelines" so to speak on how to deal with donation / charity situations.
Or, it's going to keep happening.

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If, and that is a big *IF* you are running the escrow like a business, it also might be better to take a loan for something that is another business then move other funds around. Depending on where you live and how you are running things. The best example I can come up with is a friend who runs 3 separate PC parts businesses. It's just him, no staff or anything like that, but they are all independent businesses. It's actually easier from the accounting side to borrow money from elsewhere and pay interst on it then it is for him to put money into the business as a private loan or loan money from one to another. It's a tax / accounting nightmare here in the US. I don't know how other parts of the world operate.

Just my views.

-Dave

My answer is "no". He will always be tempted to use the fund when he needed which we have already seen in the case of cabalism13.

Yes but how can we check that? I mean if it is a bitcointalk loan and it is published then it would be a red flag, but we cannot know if the escrow has loans outside bitcointalk. And as of now, knowing this, do you think in the future people in the same situation as cabalism13 and bl4nkcode would publish the loan in bitcointalk?

And I would go further, should a person run a charity that receives significant donations if they are taking low amount loans ($200) as in the case of cabalism13?

It is not incompatible to have debts with being honest, running businesses or charities, the problem is when the donations or what you get in the escrow address is several times your annual salary and you are going into debt for pennies.


I don't even want to mess with you but it seems to me a pretty generic and empty answer you have given, the point is how can we check trustworthiness.

What I know should be most important about escrow is trustworthiness, anyone that provide escrow should be perfect enough to make sure nothing go wrong. The purpose is to serves as an intermediary between two people due to trust of the service. Escrow person will have its own terms and conditions to make sure no one got scammed, both the buyer and the seller will also have to comply to the terms and conditions. If done appropriately, the buyer, seller and the escrow person will not be scammed which means no one will be scammed.

bL4nkcode was/is running an escrow service from long time on the forum. I have no idea about the trades he executed but the escrow failed for Bitcointalk Charity Program.

Going through cabalism13's trust page I see bL4nkcode even had to borrow >$400 from him. How could someone offer escrow service where he do not have enough financial solvency to pay off the money if something gone wrong in a trade or if he found guilty of sending the escrow amount to wrong person?

Shouldn't be an escrow need to have enough money of his own before performing an escrow in a marketplace?

Edit: Title changed.