Bitcoin Escrow

[Floxynice]

I was reading the bitcoin whitepaper bit by bit and I understood the idea of satoshi, why he created bitcoin. The whole idea is eliminating the third party and to avoid trusting a centralized authority. This is financial liberty.
But in this forum and also in exchanges, I have seen where third party holds fund (escrow agents, exchange P2P). And the third party has 100% power to do anything with the fund. This is centralization and big trust on the third party.

I read something called multisignature escrow, which should be what Satoshi stood for. Why did we abandon the Satoshi idea of escrow?

Check the first comment for Satoshi idea of escrow.

The satoshi idea is using a Bitcoin wallet that requires multiple keys to release the funds. The buyer, seller, and an escrow agent (third party) each hold one private key. To release the funds, two out of three must sign the transaction, reducing the need for trust.

[_act_]

This is the Satoshi post that you are referring to: Escrow

The satoshi idea is using a Bitcoin wallet that requires multiple keys to release the funds. The buyer, seller, and an escrow agent (third party) each hold one private key. To release the funds, two out of three must sign the transaction, reducing the need for trust.

Satoshi was not taking about 2of3 multisig but 2of2. You can read the Satoshi post again so that you can understand better. Just like you have said, Satoshi prefer bitcoin to be of no third party.

I like the idea but I will prefer 2of3 multisig. People on this forum prefer custodial escrow but there are many people on this forum that do not know how multisig wallet works.

[Floxynice]

This is the Satoshi post that you are referring to: Escrow

Satoshi was not taking about 2of3 multisig but 2of2. You can read the Satoshi post again so that you can understand better. Just like you have said, Satoshi prefer bitcoin to be of no third party.

Thank you for sending this link. I have never come across this post, I got the idea of satoshi escrow in an article by 99bitcoin if I am not mistaken. 2 by 2 escrow as Satoshi said can make honest person still lose. Because the honest person getting their fund depends if the other person wants to be honest. A dishonest buyer can get goods for example and still burn the BTC in escrow.

I like the idea but I will prefer 2of3 multisig. People on this forum prefer custodial escrow but there are many people on this forum that do not know how multisig wallet works.

I have not tried it but I will like to try it. But from the explanation of it, it doesn't look like something that will be so difficult.

[bitbollo]

You can made all transactions you want without third party since escrows are offering their services most of the times ... for objects and not itself for the payment.

A bitcoin transfer can be verified easily by anyone. Meanwhile you cannot verify an items has been shipped, is the original one and so on.

[EluguHcman]

I read something called multisignature escrow, which should be what Satoshi stood for. Why did we abandon the Satoshi idea of escrow?

Bitcoin in a financial climate transactions is driven by its users in the Blockchain with no autonomy having the mandates of bridging progressive transactions that maybe unwillingly within both parties of the receiver or the sender during transmission of funds.

Escrows nomenclature is to persist trusts and deals are
made accordingly.

[Solosanz]

People not abandon this idea, but it's just unpopular because it's not efficient. Let's say you're want to sell your coins for fiat and I'm interested to trade with you, how do we find the trusted person that not have any relationship with both of us? we know there are many trusted users here, but for other people that are not familiar with this forum will think all users are the same.

2 by 2 escrow as Satoshi said can make honest person still lose. Because the honest person getting their fund depends if the other person wants to be honest. A dishonest buyer can get goods for example and still burn the BTC in escrow.

Then there's no difference with 2 of 3, 3 of 3, 3 of 5, etc etc because the dishonest buyer can work together with other dishonest people who own the keys.

[Catenaccio]

Then there's no difference with 2 of 3, 3 of 3, 3 of 5, etc etc because the dishonest buyer can work together with other dishonest people who own the keys.

There is difference because wi-sth more co-signers in a multisig wallet, it's harder to scam.

If you have a trade with a trade partner, if that person is scammer, you will lose money if you are not careful.
If you have a trade with a trade partner, but the fund is escrow by 2 or 3 co-signers, it will be harder to scam successfully because it needs more people cooperate together to scam. It will start with what people picked to be co-signers. They must be reputable people to be add as co-signers of the funding wallet.

This is the Satoshi post that you are referring to: Escrow

Escrow in Satoshi Nakamoto post, his idea years ago is very different than Escrow nowadays.

[Ruttoshi]

Using escrow for payment is when there is no trust between the parties involved for smooth transaction an escrow is needed. You should also know that paying fee for escrow is not cheap because they are to make sure that nothing happens to your funds in their custody.

You can also use escrow when you don't know how to secure your wallet if funds are sent to you for business so that you will not lose the funds incase you don't have the confidence of securing your wallet properly.

[Davidvictorson]

Escrows nomenclature is to persist trusts and deals are made accordingly.

I actually like the idea of a multisignature escrow. I have read a little about it and I think it is the best thing that has been invested. When it comes to a being honest with money or in this case bitcoin, it is like pouring grease in a bucket of water they never mix. I think that this idea may have even been in existence long before it became used by Satoshi. And even in ecommerce, it is still being used in some form. Anyone who is interested can read up on this decentralized P2P trading network that uses BTC, called OpenBazaar. That's how they work.

[Aanuoluwatofunmi]

But in this forum and also in exchanges, I have seen where third party holds fund (escrow agents, exchange P2P). And the third party has 100% power to do anything with the fund. This is centralization and big trust on the third party.

Its because you have chosen to go through such, to start with, centralized exchanges are not compulsory for us to use, you can make use of a decentralized one, while the meaning of p2p is what does not require for kyc or any centralized authority for permission.

lastly, when it comes to the forum affairs and those who manage campaigns and hold funds, there is no any kyc information left on them from here, all you do is to make use of your bitcoin address for receiving payments, its now left for you to make use of a centralized exchange btc address or a non custodial wallet address, but there is no bridge at the cause of this, the forum make sure you have your privacy right from the point of your registration when joining, your email was not verified and no further personal information concerning you was required from you.

I read something called multi-signature escrow, which should be what Satoshi stood for. Why did we abandon the Satoshi idea of escrow?

Check the first comment for Satoshi idea of escrow.

You should have provided the link to that, using a multi-sig wallet is not by force, its a choice.

The Satoshi idea is using a Bitcoin wallet that requires multiple keys to release the funds.

Don't get the wrong idea behind using a multi-sig wallet from the concept behind Satoshi invention, here we may also require cosigners and not multiple keys as you said.

[_act_]

You can also use escrow when you don't know how to secure your wallet if funds are sent to you for business so that you will not lose the funds incase your wallet is vulnerable to attack.

This is not correct. The buyer will have the coins sent to the escrow while the seller will have the coins received after the done deal. Which means if escrow is used or not used, the coins will still be with buyer at some point while the coins will later be transferred to the seller. This makes your point to be pointless. Anyone that will make his wallet vulnerable to attack should not use crypto at all. Also no one will know his coin is vulnerable unless his coins has been stolen.

[icalical]

I do agree with OP that Bitcoin still relying on third parties like exchanges or P2P platforms, even though Satoshi’s vision was all about minimizing trust in centralized entities. The multisignature approach does align more with Satoshi’s goal, as it spreads control across multiple parties, reducing reliance on any one entity. However Multisignature escrow hasn't really seen wider adoption yet because it comes down to either complexity or usability.

While these multisig setups are more cumbersome compared to a traditional wallet, losing one party's key could mean irretrievably locking up funds forever. For casual users, too, it's easier to implicitly trust the centralized platforms automatically perform these processes behind the scenes, as the latter goes totally against the ethos of decentralization. Still, multisig is used on HodlHodl and Bisq, though not as widespread because many people prefer convenience over control.

So IMO the idea of Satoshi is not fully rejected, it's just that it hasn't reached mainstream adoption because people still prefer ease of use, even when that comes at the cost of more trust in third parties.

[hd49728]

The multisignature approach does align more with Satoshi’s goal, as it spreads control across multiple parties, reducing reliance on any one entity. However Multisignature escrow hasn't really seen wider adoption yet because it comes down to either complexity or usability.

Multisig wallets, multisig Escrow will cost more satoshis in transaction fees too, but if you want a safer deal and procedure to make it done safely, it's good choice. A little bit more satoshi spent for transaction fees, Escrow service fees, would be acceptable if it can help you to lose more, and bigger fund if you are scammed in a non-Escrowed trade.

Another horrible practice is people want to have convenience and use centralized exchanges to store their bitcoin. It's custodial wallet and it's unsafe for Bitcoin storage in short term and long term.

[betswift]

The multisignature approach does align more with Satoshi’s goal, as it spreads control across multiple parties, reducing reliance on any one entity. However Multisignature escrow hasn't really seen wider adoption yet because it comes down to either complexity or usability.

Multisig wallets, multisig Escrow will cost more satoshis in transaction fees too, but if you want a safer deal and procedure to make it done safely, it's good choice. A little bit more satoshi spent for transaction fees, Escrow service fees, would be acceptable if it can help you to lose more, and bigger fund if you are scammed in a non-Escrowed trade.

Another horrible practice is people want to have convenience and use centralized exchanges to store their bitcoin. It's custodial wallet and it's unsafe for Bitcoin storage in short term and long term.

However, it would be as such only if an exchange finds you with some shady money on hand or transactions like that. If you do have small sums on CEXes, you would probably go off the radar.

[NotATether]

Multisignature requires two parties to agree on a transaction to make so that they both sign it.

It is trustless, but if both of the parties dispute where the funds should go, that transaction isn't going to get signed, and the funds are going to sit there forever.

This ad-hoc escrow system lets people have a default option of funds returning by a third, trusted party in case one of the other two parties (or both) no longer becomes trustworthy.

[tread93]

I was reading the bitcoin whitepaper bit by bit and I understood the idea of satoshi, why he created bitcoin. The whole idea is eliminating the third party and to avoid trusting a centralized authority. This is financial liberty.
But in this forum and also in exchanges, I have seen where third party holds fund (escrow agents, exchange P2P). And the third party has 100% power to do anything with the fund. This is centralization and big trust on the third party.

I read something called multisignature escrow, which should be what Satoshi stood for. Why did we abandon the Satoshi idea of escrow?

Check the first comment for Satoshi idea of escrow.

The satoshi idea is using a Bitcoin wallet that requires multiple keys to release the funds. The buyer, seller, and an escrow agent (third party) each hold one private key. To release the funds, two out of three must sign the transaction, reducing the need for trust.

It is a very fine idea but what if the two of those people die and now the secrets of the funds are lost forever? You might as we’ll stake your whole fortune on a piece of paper with directions on how to get to it where it is buried in a hole in a very remote place 😂