Escrow is when an uninterested third-party (the escrow agent) holds something important to one of the other parties. Escrow agents can be either one person or a group of people acting as some type of organization (web services are always still handled by human beings in case of dispute, though).
Usually on this forum, it's used where someone wants to sell something, but the buyer doesn't want to pay upfront because he doesn't fully trust the seller. Instead, the seller finds a reputable escrow agent who will hold his money which the buyer must also agree to use. Then, the escrow agent is basically just a contract enforcer. He ensures the contract (this could be as simple as the seller saying "I'll sell you two working 1H-IEN4-KL LCD monitors for 1BTC") is fully enforced. When the escrow agent is satisfied that the contract has run successfully to its end (or when the buyer tells the escrow agent escrow can be released to the seller), the escrow agent will send the coins or whatever to the seller.
Escrow can't protect you from everything and is constrained by the contract. They often act as arbitrators in case of dispute, where they'll settle on who breached contract and what the outcome of that should be, which may or may not be in your favor. A weak purchase agreement like the simple example I gave is an example of abusing escrow due to how much is left up in the air (Who pays shipping on returns? What happens if there's a dead pixel? etc). Oftentimes, purchase agreements are really vague, so you're relying on the escrow agent just "doing what's right," which is obviously very subjective.
There are a bunch of other uses for escrow, though. If a lender wants collateral from a lendee, the lendee would want that collateral held by an escrow agent so they know the lender won't just run off when given the collateral. If someone has a giveaway where they offer to give .05BTC to charity each time someone posts an original photograph of a llama spitting, they might want to pre-pay donations into charity so the people taking pictures of llamas know their efforts won't be wasted.
so it's more like a middle man.Usually on this forum, it's used where someone wants to sell something, but the buyer doesn't want to pay upfront because he doesn't fully trust the seller. Instead, the seller finds a reputable escrow agent who will hold his money which the buyer must also agree to use. Then, the escrow agent is basically just a contract enforcer. He ensures the contract (this could be as simple as the seller saying "I'll sell you two working 1H-IEN4-KL LCD monitors for 1BTC") is fully enforced. When the escrow agent is satisfied that the contract has run successfully to its end (or when the buyer tells the escrow agent escrow can be released to the seller), the escrow agent will send the coins or whatever to the seller.
Escrow can't protect you from everything and is constrained by the contract. They often act as arbitrators in case of dispute, where they'll settle on who breached contract and what the outcome of that should be, which may or may not be in your favor. A weak purchase agreement like the simple example I gave is an example of abusing escrow due to how much is left up in the air (Who pays shipping on returns? What happens if there's a dead pixel? etc). Oftentimes, purchase agreements are really vague, so you're relying on the escrow agent just "doing what's right," which is obviously very subjective.
There are a bunch of other uses for escrow, though. If a lender wants collateral from a lendee, the lendee would want that collateral held by an escrow agent so they know the lender won't just run off when given the collateral. If someone has a giveaway where they offer to give .05BTC to charity each time someone posts an original photograph of a llama spitting, they might want to pre-pay donations into charity so the people taking pictures of llamas know their efforts won't be wasted.
that's cool.
can any1 be an Escrow? (I dont want to be/) just asking how hard it is to be 1?
