Bitcoin Forum

when someone is going to do a trade, i always see the buyer ask if the seller use escrow.. i understood that is a way to be safe in the trade, but what is exactly this and how do i use it??
tks

An escrow is a person trusted by both parties who holds the BTC for the trade until the buyer receives the goods. If there is a dispute the escrow will provide mitigation and try to resolve the issue, if it cannot be resolved then he will decide who gets the BTC.

People usually provide escrow services for a very low fee or donation, even in some cases people will do it for free.

buyer <--deal--> seller
buyer  --btc--> escrow
seller --good--> buyer
escrow --btc --> seller

hummm... but if me and the seller doesnt have a person who both trust?

If one of you doesn't trust the person or service then don't use the service.
If that means the transaction doesn't happen it doesn't happen.

A member with a high post count in the thousands should be plenty trustworthy for anything below 10 btc.

alright.. thanks everyone...

No...No..no...Don't judge on post counts, a few users with very high post counts have scammed. Use someone trusted in the community. Use the trust service for a example. John K is very well known escrow service provider.

I don't have a reputation but would be willing do an escrow if asked to.

875 posts to go...

I wouldn't use an escrow unless I knew the legal address of the person / business holding the coins.
That's just common sense.

You might not need to trust the escrow as much as you think. You can do a 2 of 3 tx. These can be awkward to do as there is no GUI for it yet, but basically how it works is the BTC are paid to an address where each person has their own private key for it (one for buyer, one for seller, one for escrow), you need 2 of the 3 private keys to spend the money.

This way the escrow cannot take the coins and run. The only way the BTC can be spent is if any 2 people agree to the transaction.

You can use something like NashX

I've never even heard of that before. How does this work, or how do you do it?

It isn't used much as it hasn't been fully integrated into the client yet. It's only possible to do it from the API and even then it's complicated.

https://en.bitcoin.it/wiki/Original_Bitcoin_client/API_Calls_list

Have a look at addmultisigaddress, createmultisig

I came across this site recently that supposedly makes it easier to do this:

http://www.bitescrow.org/

Haven't tried it out yet though.

Thanks for the info! This is kind of cool, but the site is pretty confusing. They really need a guide that helps better explain who gets what and exactly what steps they need to take.

Interest stuff Blazr, thanks.

Id just use John K, that man is easily the most trusted escrow in the business. Check his trust rating.

So in that scenario, once the buyer receives and is happy they send key to seller and escrow person only needs to be involved when there is a dispute. That seems like a nice system.

wow thats really nice.. so http://www.bitescrow.org/ is a service to be used by the escrow?

This is very useful :) Many companies uses solutions like this but with other currencies to ensure there corporate funds isn't fiddled with. So if the company have 3 owners, 2 of them have to give their passwords to complete a transaktion :)

That's a great idea. Doesn't stop two people from going rogue and splitting it though, :p.