Always use Escrow

[Ispep]

I've been on read mode for close to a month on this forum,and it's been invaluable learning for me as everyday I get to learn quite a new thing from obvious quality discussions in here, though IMHO the merits discussions are a bit overstretched and clouding other important topics that ought to be discussed,ive learnt how the merit system works,who merit sources are,what Smerits are,what happens to unused Smerits, how long it takes to refill....Blah blah blah,it Just keeps popping up every single day.

But there happens to be one very important topic I hardly ever saw,and that happens to be BITCOIN Escrow,you may say it's an all familiar one(probably to the veterans in here),but is to the noobs??,and if the merit discussions could be rolled over every single day, why not one that educates users(noobs) on how to protect themselves from scam and cheaters...

Bitcoin Escrow happens to be an agreement/contract between two parties who happen to want to trade directly with each other,ousting an exchange in the process, if you trade with an exchange they cover the risks involved.
This decentralized network is anonymous and there is a word that is blacklisted when dealing with users in here, and that word is TRUST, you cannot afford to trust absolutely anyone,as there happens to be no means of tracing a scammer, so to avoid mishaps of such,both parties contact a Trusted neutral third party(escrow service),and no exchange will be done directly between the both parties but invariably through the trusted escrow third party service..

Mr A wants to buy 4 btc from Mr B
Mr A would simply deposit his money into the account of the escrow service,after doing this,this trusted escrow(third party) would notify mr B of the payments,mr B would deposit the 4 btc into the trusted escrow wallet,no deal is done directly..
The escrow(Trusted) service then sends the money to Mr B and deposits the 4btc to Mr A wallet address

In the event of any breakdown,the Trusted third party decides how to settle issues by both parties receiving what they had initially deposited..

Always use an escrow(Trusted)when trading directly,any user who refuses to trade directly with you,using an Escrow is most probably a scam and should not be trusted(Trade with caution)

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[Jet Cash]

I've always felt that a better system is to use a multi-sig Bitcoin payment. You include a trusted 3rd party, and stipulate that any 2 signatures from the 3 parties can release the payment. This seems to be a much cleaner method.

[guybrushthreepwood]

Always use [a trusted] Escrow. Not much point in sending your money straight to a scammer, and there have apparently been quite a few escrow scams on this forum over the years.

I've always felt that a better system is to use a multi-sig Bitcoin payment. You include a trusted 3rd party, and stipulate that any 2 signatures from the 3 parties can release the payment. This seems to be a much cleaner method.

That's still essentially an escrow isn't it? You're at least involving as third party. I think multi-sig is probably too 'advanced' for most of the newbies in crypto as most of them seems clueless, and that's why using a trusted escrow agent might be more preferable in those situations.

[Coyster]

Always use [a trusted] Escrow. Not much point in sending your money straight to a scammer

The purpose of an Escrow in the first place is due to lack of trust,so before two anonymous parties go into trading it's only normal that the neutral third party will be one both parties can TRUST

No one would actually want to send money to an untrusted party,its basically obvious

[guybrushthreepwood]

Always use [a trusted] Escrow. Not much point in sending your money straight to a scammer

The purpose of an Escrow in the first place is due to lack of trust,so before two anonymous parties go into trading it's only normal that the neutral third party will be one both parties can TRUST

No one would actually want to send money to an untrusted party,its basically obvious

And yet people do. Anyone can offer escrow or claim to be a trusted one and those who are new to this forum might not know who to trust or be duped into using them. I've seen people on here with no feedback offering to escrow deals just because they're a Senior or Hero account which they think that gives them some seniority or trustworthiness and it obviously doesn't.

[Jet Cash]

That's still essentially an escrow isn't it? You're at least involving as third party. I think multi-sig is probably too 'advanced' for most of the newbies in crypto as most of them seems clueless, and that's why using a trusted escrow agent might be more preferable in those situations.

Yes - the third party is an escrow agent/ arbitrator, and should probably be paid for participation. The main difference is that the escrow agent does not have to hold the funds. Also, it provides the possibility for the release of the funds if the buyer and seller both sign the transaction. In this case the escrow agent is only there in the case of a dispute.

[CoinREAPER21]

Escrow is basically a service that holds coins for their customers until a certain deal is completed or each party agreed or satisfied with the deal. Escrow is the best medium for trading or dealing to another person specially if a large amount of money is involve. I found this article very helpful when choosing the top and trusted Escrows and this could benefit you someday.

https://bitcointalk.org/index.php?topic=2439910.0

[Alluro]

Before you choose an escrow, please make sure they are trusted or not. Because I have seen a lot of members scammed with escrows. There are a lot of scam escrows and OTC markets everywhere. It's hard to deal with escrows right now. Please be safe guys.

[Ladysmith]

Escrow systems are crucial in adding a much-needed layer of security in an unregulated market. Not having one leads to the horror stories that scare people away from crypto in the first place. Guaranteed transactions and fraud resistance is extremely important for mass acceptance and a global economy based on the virtual. Most noteworthy ICO's will be using them along with Distributed Exchange networks, which eliminate exchanges altogether (exchanges are susceptible to hackers.)

[Akoldi_ibk]

Always use an escrow(Trusted)when trading directly,any user who refuses to trade directly with you,using an Escrow is most probably a scam and should not be trusted(Trade with caution)

Thank you for laying more emphasis on the word "Trusted", not just any escrow but trusted one. I will like to add the word reputable to the phrase — trusted escrow with high reputation, because there have been many known cases in which Mr A will collaborate with the escrow to scam Mr B. Let's just trade with caution.

[jackg]

That's still essentially an escrow isn't it? You're at least involving as third party. I think multi-sig is probably too 'advanced' for most of the newbies in crypto as most of them seems clueless, and that's why using a trusted escrow agent might be more preferable in those situations.

Yes - the third party is an escrow agent/ arbitrator, and should probably be paid for participation. The main difference is that the escrow agent does not have to hold the funds. Also, it provides the possibility for the release of the funds if the buyer and seller both sign the transaction. In this case the escrow agent is only there in the case of a dispute.

That is how it should typically work and is a much better system if you're doing digital currency transfers.
If you're doing transfers of physical goods with bitcoin then the escrow has to hold the physical good and not the bitcoin because they have to prove the goods are what they are before they invoice the buyer.

The example explained in the OP isn't a very good one.

What should happen is, let's say Mr A is a buyer and Mr B is a seller.
Mr A deposits 4BTC worth of fiat into the escrow account. Mr B then sends a message to both of them stating the address that Mr A needs their funds to be sent to. Escrow then send an awknoledgement to both to state they have received the address/message, Mr B then sends the funds to Mr A and once the escrow sees there's enough confirmations (or wakes up if people are impatient like me and send bitcoin transactions with low fees just before they're about to fall asleep :-)) they release the fiat from their accounts to Mr B. Actually, a multisig wouldn't therefore work in this case as it would be the fiat you'd want to be escrowed as it's less traceable (not on the blockchain).

(generally an awknowledgement from a solicitor/escrow will be signed with their private key - can be a bitcoin address or a degital certificate that affirms their identity).