Bitcoin Forum

Dear fellow Bitcoin Enthusiasts,

I blame myself to understand bitcoin. First when I got started with bitcoin - a couple of years ago - it took some while until I got it. Now I want to get my head around the newly evolving blockchain hype.

I think I understand how the blockchain can disrupt notary services: just get the hash of a document and sign it to the blockchain. A notary service is costly and time intense. The blockchain can do that it with a couple of cents. Ok.

Now comes my question and any hints, suggestions in the form of explanations or links are highly appreciated:

How exactly can the bitcoin blockchain disrupt a business model like the one of escrow.com and are there any startups or projects that aim towards that direction?

Or to put my question more specific:

Alice wants to buy a domain name from Bob. They agree on a price. Alice has to transfer bitcoins to Bob, Bob has to transfer the Authentication Code for the Domain Name to Alice.

As they do not trust each other they can use the service of escrow.com. Both trust escrow.com. Deal done.

How can they do the transfer without escrow.com over the blockchain?


Thank you so much,


Bitone

They can create a 2 of 2 multisig address. To withdraw funds signature from both alice and bob are needed.
Both parties send their public key to each other and create a 2 of 2 multisig address with their key and the key that they got. If they got the same address they can continue. Bitcoin is deposited in the address , service is provided. If service is satisfactory service taker signs the tx of the service provider. Deal is done.
Sorry if you got confused. You can google about multisig address.

How they do it is not really important in my opinion. What makes it a better tech is the fact that there is no way to cheat the blockchain. The transaction and names are permanently recorded into a public ledger and can be used as (possibly) irrefutable evidence in case of a dispute.

I still do not get the point:

Lets say Alice wants to buy example.com from Bob for 1 BTC.
They create a 2 of 2 multisig adress.
Now there are two possible steps ...

Possibility 1: Alice deposits 1 BTC to adress and signs the tx.
As soon as Bob confirms he has the 1 BTC without sending the AuthCode and is still in control of the domain name.
This is unsecure.

Possibility 2: Alice deposits 1 BTC to adress and does not sign the tx.
Bob sends the AuthCode to Alice. As soon as Alice gets the AuthCode, she can run away with the domain name without signing.
This is unsecure.

Maybe you could clear things further.


Thanks,

Bitone

Indeed a 2-of-2 multisig would be one way as an alternative to escrow. A 2-of-3 multisig can be done as well with a third party arbitrator, pretty much like escrow. If the two can not get into agreement, the third party can settle it.