I wanted to post this step by step process on my get started page so you can see that this is arbitration and not the same thing as escrow. Multisig arbitration has a much lower risk associated with using it:
Get Started
To Begin Your Transaction:
- You will need a bitcoin wallet.
If you are not that far along yet you can get a wallet supporting these types of transactions at these websites:
Bitcoin-qt
Electrum
Android Wallet (Android app)
BitcoinSpinner (Android app)
Mycelium (Android app)
Coinbase (Web wallet)
- Once both parties have a funded bitcoin wallet you are ready to set up your transaction.
The transaction will be run on the Bitrated.com website and we at Coinflo.com will act as your arbitrator during the transaction.
If there is a dispute between you and the other party we will make a ruling based on evidence from both sides and decide which party gets the funds.
Clicking the link below will open up a new window in your browser and start a transaction at the Bitrated webite. You can refer back to this page for instructions as you go along.
Start Transaction (Coinflo.com is already selected as the arbitrator for the transaction.)
Currently we only charge for this service when a dispute arises so payment is needed only if you have a problem.
To settle disputes
3% of the transaction amount will be charged. Free For Bitcointalk members until further notice
- Set the terms of the transaction.
The terms create a contract that both parties will follow and provides information to all parties about the transaction. Create a set of terms and insert them into the provided area on the bitrated.com transaction page.
Some important common elements of the terms are:
Contact information (phone numbers, email/bitmessage addresses, etc). Bitrated does not provide a way to communicate with users. Without contact information listed in the terms, the arbitrator won't be able to reach you.
Identifying information for both parties.
Payment bitcoin address for the seller (where the funds should be sent after buyer accepts product).
Refund address for the buyer (where the funds should be returned to if needed).
Information about the product/service being sold.
Known defects with the product that the buyer was made aware of.
The agreed upon delivery method.
How to handle cases where one party isn't responsive (e.g. if one party does not respond to the arbitrator inquiries within 2 weeks, the funds should be sent to the other party).
If the arbitrator offers multiple tiers of service, which one was chosen for the transaction.
How are fees (both Bitcoin transaction fees and the arbitrator fees in case of dispute) are split between the buyer and the seller.
If there are any relevant files (e.g. pictures of the product), you can create a zip file with them and a text file containing the terms, and use that zip with the "File" tab. In this case, both parties should have a safe and exact local copy of the zip file to send the arbitrator in case of dispute. Any changes made to any of the files in the zip would invalidate it.
Any other agreed upon terms or conditions you feel would make it easier for the arbitrator to rule in case of dispute.
- Copy Your Private Key
Be prepared to copy and transfer your Private Key into a secure location. The Private Key is provided on the webpage at Bitrared.com (click the "advanced options" link to access your private key). Transfer the Private key to an external storage device like a thumb drive, dvd, cd or floppy disk.
This piece of information must be kept secure and available for later use.
- Get in touch with your buyer/seller (via email)
Send them with the URL provided on the Bitrated website. Be ready for the other party to agree to the transaction terms around the same time you submit the URL, since the Bitrated.com agreement page needs to stay open until the other party agree to the terms.
- Copy URL
Once both sides have agreed to the terms, a new URL will be provided that allows the transaction to proceed and the bitcoin to be held in the Bitcoin Network. Copy this URL in the same place as your Private key and keep it secure for later use. You will need this URL to release the funds when you are ready.
- Fund the Multisig Address
This is done by going to the webpage using the URL you copied and stored and following the instructions. (Paste the URL into the address bar of your browser and hit enter). A bitcoin multisig address is automatically created and can be funded by the buyer.
The coins transferred to this address will be released once two of the three parties (buyer, seller and arbitrator) sign the document with their Private Key.
The buyer enters the agreed price of the goods/servics (in bitcoin) and signs it and sends the coins the the multisig address. They will be stored there until released at the end of the transaction.
- Inspect the goods/services
After the goods arrive or the services payed for are completed the buyer can detirmine if the terms of the transaction were met and then the funds can be released with the corresponding private keys.
- Release the Funds using the copied URL web page
After inspection and approval of the godds/services, email the seller and get the Seller's Bitcoin Address which is where the funds are to be sent.
Go to the copied URL web page and insert the Buyers address and sign the transaction. Make sure both the buyer and seller sign the transaction to release the funds.
Unless there is a dispute the transaction is complete.
If there is a dispute contact us:
info@coinflo.comAfter notification of a dispute we will start the arbitration process.
Let me know if you have any comments.
Thanks
