Bitcointalk Escrows - Trade Safely!

[SebastianJu]

For example 2 of 4... it only needs a corrupt escrow who comes out as a trader and trades. Then one person has the power to release the coins. 3 of four would be more safe then since it will be harder and harder to impersonate more parties.

By the way, when will the server give his key? The one controlling the server might be one of the involved parties too.

And the higher the last number the higher the chance that 2 are the same person again.

I knew 2-of-4 would be a focus point for security, and there's no denying the vulnerability involved with 2-of-4, a risk that is minute in comparison to that of trusting one person with 100% access to escrow funds.

That's right. Though the thing is, all the time i do escrow it VERY rare that someone asked for multisig. The times it did not happen for reasons i don't remember but most users seem to want the easy solution. Even when this means that there is a risk. Though they use a user they trust, so most might not think about potential risks that still might be there. Dunno.

I see most of the escrow service providers offer 1-of-1 escrow, which I don't have to explain the heightened risk involved here. We offer 2-of-3, and 2-of-4, more than what most multisig escrow providers can say. While fraud via collusion is possible, I want to point out how it's impossible for the site owner to 'run off' with everyones coins when they are in 2-of-3/4 multisig.

With everyones maybe not. But they might be able to impersonate an escrow and initiate a trade with a party that pays in bitcoin. Doing that large scale, so impersonating seller and escrow, even by presenting the real users names, they could scam for a couple of days the paid in coins.

I wonder if it would be worth it. Maybe when a big sale buy offer show up?

While 2-of-4 does have a small risk of theft, the benefits outweigh the risk in my opinion.

For example, if a dispute arises, and neither party can come to an agreement, the arbiter still has the power to finalize the transaction by involving keysCrow to help sign-off on the 50/50 split. With 2-of-3 and 3-of-4, this is impossible. Additionally, 3-of-4 would require manual intervention for every transaction to be finalized, more involvement from our arbiters than what we envisioned for keysCrow.

I'd like to stress the point: keysCrow is not full-service escrow: which means we don't "release funds on demand" (ie: sign/send rawtx). We create multisig addresses, and only get involved to provide support for transaction disputes.

What do you do when the trade was done in a way that makes it impossible to judge who was right? Normally an escrow would start with checking out risks of a trade and he would inform the traders about everything. If they want to go through then fine. The same goes for handling the trade so that there are evidences of who is right. Might be a problem since often enough people would do it wrongly out of inexperiene.

Regarding multisig, how easy is it for a trader to deal with the keys? What would traders have to do or specifically has to learn to do? I only want to see how scaring it would look to handle it that way instead simply sending bitcoins to the address the escrow tells to send to?

[-XXIII-]

But they might be able to impersonate an escrow and initiate a trade with a party that pays in bitcoin. Doing that large scale, so impersonating seller and escrow, even by presenting the real users names, they could scam for a couple of days the paid in coins.

I wonder if it would be worth it. Maybe when a big sale buy offer show up?

While fraud via collusion is possible, I want to point out how it's impossible for the site owner to 'run off' with everyones coins when they are in 2-of-3/4 multisig.

With everyones maybe not. But they might be able to impersonate an escrow and initiate a trade with a party that pays in bitcoin. Doing that large scale, so impersonating seller and escrow, even by presenting the real users names, they could scam for a couple of days the paid in coins.

I suppose now we're talking about me personally doing this impersonation. I understand what you're saying, and this boils down to trust. I'm not going to beg for your trust, but just look at what I'm offering the community, and how it evolved from a shitty idea into something that's almost bulletproof. I'm offering anonymous 2-of-3 multisig, with optional 2-of-4(possibly 3-of-4) with a trusted community member as dispute arbiter. Any of the big escrow names could just as easily take off with a large escrow, just as the recent MasterP thing happened. I'm actively trying to prevent theft and loss.

What do you do when the trade was done in a way that makes it impossible to judge who was right? Normally an escrow would start with checking out risks of a trade and he would inform the traders about everything. If they want to go through then fine. The same goes for handling the trade so that there are evidences of who is right. Might be a problem since often enough people would do it wrongly out of inexperiene.

How often does this happen? Having records of sale would be outlined in the terms of use which users would agree to. We can't be responsible for every little detail; the sale is between the buyer and seller, dispute arbiters are judges, not money handlers.

Regarding multisig, how easy is it for a trader to deal with the keys? What would traders have to do or specifically has to learn to do? I only want to see how scaring it would look to handle it that way instead simply sending bitcoins to the address the escrow tells to send to?

It's easier for the buyer than the seller. The buyer only needs to know how to get public key, they can authorize keysCrow to deliver the server's private key to the seller, allowing the seller to sign the funds out of escrow manually. This way, transaction can take place without dispute arbiters ever knowing.
Yes, for sellers, almost everything is manually processed, sorry but not sorry. If a vendor needs multisig, they know how to use it. We've created an alright guide to using multisig, and can start building tools like a rawtransaction builder. We'll guide users through the process, but won't do it for them.


While it's entirely possible to enable 3-of-4, it would remove the element of anonymity as people would be required to contact arbiters to sign off on deals. This really isn't the idea behind keysCrow, but if that's what people want we can enable 3-of-4 for arbiter selections, and still have anonymous 2-of-3 via keysCrow.

[SebastianJu]

I suppose now we're talking about me personally doing this impersonation. I understand what you're saying, and this boils down to trust. I'm not going to beg for your trust, but just look at what I'm offering the community, and how it evolved from a shitty idea into something that's almost bulletproof. I'm offering anonymous 2-of-3 multisig, with optional 2-of-4(possibly 3-of-4) with a trusted community member as dispute arbiter. Any of the big escrow names could just as easily take off with a large escrow, just as the recent MasterP thing happened. I'm actively trying to prevent theft and loss.

I didn't think you might take this personal and i hope you didn't. I only pointed out a potential risk. Might be even possible someone hacks the site, can't get into the wallet but finds a way to impersonate.

I see what you want to do... so what i want to say is the following. Imagine being an escrow holding hundreds of bitcoins (Which iam not. ) then you are liable and you need to protect the traders since it is like protecting yourself. Then you get asked to Trust a third party with coins you hold. The coins are at least in a potential risk of not being controlled by you. Which raises the risk for the escrow especially.

I DON'T say that you would do something funny, i only say things like that happen, see master-P, trusted but... At the end it would mean the escrow is trusting someone with the funds he should have in escrow.

What do you do when the trade was done in a way that makes it impossible to judge who was right? Normally an escrow would start with checking out risks of a trade and he would inform the traders about everything. If they want to go through then fine. The same goes for handling the trade so that there are evidences of who is right. Might be a problem since often enough people would do it wrongly out of inexperiene.

How often does this happen? Having records of sale would be outlined in the terms of use which users would agree to. We can't be responsible for every little detail; the sale is between the buyer and seller, dispute arbiters are judges, not money handlers.

It happens alot that a trade is not starting because i explain the buyer the risks of paypal, skrill, giftcodes and whatever. And most traders have no big clue about how to make their case strong so they can win a dispute.

I would not have it running at autoaccept.

Regarding multisig, how easy is it for a trader to deal with the keys? What would traders have to do or specifically has to learn to do? I only want to see how scaring it would look to handle it that way instead simply sending bitcoins to the address the escrow tells to send to?

It's easier for the buyer than the seller. The buyer only needs to know how to get public key, they can authorize keysCrow to deliver the server's private key to the seller, allowing the seller to sign the funds out of escrow manually. This way, transaction can take place without dispute arbiters ever knowing.
Yes, for sellers, almost everything is manually processed, sorry but not sorry. If a vendor needs multisig, they know how to use it. We've created an alright guide to using multisig, and can start building tools like a rawtransaction builder. We'll guide users through the process, but won't do it for them.

Ok, sounds like you target the business seller then. Probably not a big problem compared to bitcoin noobs.

While it's entirely possible to enable 3-of-4, it would remove the element of anonymity as people would be required to contact arbiters to sign off on deals. This really isn't the idea behind keysCrow, but if that's what people want we can enable 3-of-4 for arbiter selections, and still have anonymous 2-of-3 via keysCrow.

I feel myself that it's tempting to not having to implement all the time into escrowing and letting it run automatically. Only going through disputes would not be hard, well it can be hard, but being asked what to do and seeing no evidences and nothing would be a problem. I would want to see the deal and suggest precautions, then accept the deal and i can be sure that either i will have ways to prove who is at fault on dispute or i know that the buyer accepted risks i pointed out. That could prevent hurting my trust or good name... i think.

[-XXIII-]

I see what you want to do... so what i want to say is the following. Imagine being an escrow holding hundreds of bitcoins (Which iam not. Cheesy) then you are liable and you need to protect the traders since it is like protecting yourself. Then you get asked to Trust a third party with coins you hold. The coins are at least in a potential risk of not being controlled by you. Which raises the risk for the escrow especially.

hm.. I see your point. When you put it this way, I understand your concerns completely. I can switch multisig from 2-of-4 to 3-of-4 for arbiter selected multisig, but this really does ruin the anonymous aspect, and our arbiters will always have to be contacted to help withdraw funds.

Another option would be to go from 2-of-4 to 2-of-3, but then addresses could potentially be recreated, and buyers would need advanced skill (signing and broadcasting) to finalize without the Arbiter.

edit 02/07: Just thought, it's also entirely possible to just have the option between 2-of-4 and 3-of-4 for arbiter selection.

That's right. Though the thing is, all the time i do escrow it VERY rare that someone asked for multisig. The times it did not happen for reasons i don't remember but most users seem to want the easy solution. Even when this means that there is a risk. Though they use a user they trust, so most might not think about potential risks that still might be there. Dunno.

I feel myself that it's tempting to not having to implement all the time into escrowing and letting it run automatically. Only going through disputes would not be hard, well it can be hard, but being asked what to do and seeing no evidences and nothing would be a problem. I would want to see the deal and suggest precautions, then accept the deal and i can be sure that either i will have ways to prove who is at fault on dispute or i know that the buyer accepted risks i pointed out. That could prevent hurting my trust or good name... i think.

You can't have one without the other my friend, not that I can see anyway.. With having it auto-accept and having a TOS, Arbiters have plausible deniability when the transaction took place without their knowledge. There are many open communication channels available to users, using them is suggested but we can't offer anonymous escrow by forcing people to talk to us.

edit 02/08: I've decided against including other people as arbiters for keysCrow and will just keep 2-of-3, at least for now.

[mexxer-2]

Just to make it visible: Tomatocage is closing his escrow service temporarily(but from what I've seen, he seems to be very inactive, and the change might be permanent).

Reference: His sig


Also, considering marco has yet to answer my PM, I'd like to ask. Whats the requirement for being enlisted here?

[SebastianJu]

I see what you want to do... so what i want to say is the following. Imagine being an escrow holding hundreds of bitcoins (Which iam not. Cheesy) then you are liable and you need to protect the traders since it is like protecting yourself. Then you get asked to Trust a third party with coins you hold. The coins are at least in a potential risk of not being controlled by you. Which raises the risk for the escrow especially.

hm.. I see your point. When you put it this way, I understand your concerns completely. I can switch multisig from 2-of-4 to 3-of-4 for arbiter selected multisig, but this really does ruin the anonymous aspect, and our arbiters will always have to be contacted to help withdraw funds.

Another option would be to go from 2-of-4 to 2-of-3, but then addresses could potentially be recreated, and buyers would need advanced skill (signing and broadcasting) to finalize without the Arbiter.

edit 02/07: Just thought, it's also entirely possible to just have the option between 2-of-4 and 3-of-4 for arbiter selection.

That's right. Though the thing is, all the time i do escrow it VERY rare that someone asked for multisig. The times it did not happen for reasons i don't remember but most users seem to want the easy solution. Even when this means that there is a risk. Though they use a user they trust, so most might not think about potential risks that still might be there. Dunno.

I feel myself that it's tempting to not having to implement all the time into escrowing and letting it run automatically. Only going through disputes would not be hard, well it can be hard, but being asked what to do and seeing no evidences and nothing would be a problem. I would want to see the deal and suggest precautions, then accept the deal and i can be sure that either i will have ways to prove who is at fault on dispute or i know that the buyer accepted risks i pointed out. That could prevent hurting my trust or good name... i think.

You can't have one without the other my friend, not that I can see anyway.. With having it auto-accept and having a TOS, Arbiters have plausible deniability when the transaction took place without their knowledge. There are many open communication channels available to users, using them is suggested but we can't offer anonymous escrow by forcing people to talk to us.

edit 02/08: I've decided against including other people as arbiters for keysCrow and will just keep 2-of-3, at least for now.

A solution for the arbiter could be something like including a second escrow. Though i wonder who might chose his escrow. Potentially a Fake escrow could be chosen too then but generally safety should go up  at least when x of x is rising + 1. Running a scam then would be a lot of work, though an escrow should be able to deny the use of an unknown escrow chosen by one of the traders of course.

We spoke in the thread https://bitcointalk.org/index.php?topic=1308670 about it. It should make scamming a lot harder at least. The downside is that two escrow would have to agree probably and the fees has to be higher since two escrows are involved. Of course it can be offered as the more safe solution to chose. A higher payment would be justified. Since you probably earn on fees then you would have 2 escrow involved in one trade too.

I think this might need more thoughts put into though.

[Blazed]

Just to make it visible: Tomatocage is closing his escrow service temporarily(but from what I've seen, he seems to be very inactive, and the change might be permanent).

Reference: His sig


Also, considering marco has yet to answer my PM, I'd like to ask. Whats the requirement for being enlisted here?

The escrow selection is pretty slim these days. Glad I never need escrow services myself 

[bitpop]

I'm probably going to close mine

[Dabs]

When you guys all quit, I will have to raise my minimum and my fee. Those who really need it will gladly pay, those who don't won't.

Any of the big escrow names could just as easily take off with a large escrow, just as the recent MasterP thing happened.

I don't consider ~23 BTC all that big. It wasn't just one transaction, it was many small ones that added up to that amount.

However the phrase and statement used is like saying "Anyone can steal." then you lump everyone, because it is a blanket statement that applies to all.

The following statements are all true:

1. Anyone can steal, murder, or commit a crime.
2. Trust no one, verify, and be suspicious anyway.

It applies to everyone, including the big five (or big three), but that's not really a nice thing to say about them.

[-XXIII-]

I think this might need more thoughts put into though.

Yes, much thought has been and will continue to pour into this. For now, 2-of-3 works fine, at least multisig is an option.

However the phrase and statement used is like saying "Anyone can steal." then you lump everyone, because it is a blanket statement that applies to all.

True, nobody is innocent; except potential doesn't imply guarantee.

[SebastianJu]

I think this might need more thoughts put into though.

Yes, much thought has been and will continue to pour into this. For now, 2-of-3 works fine, at least multisig is an option.

Keep me updated on the development. In the past the cryptotech has surprised so often that i would not be astonished too much if there once a cryptech exist that can completely eradicate risks.

[SebastianJu]

This is a question to other escrows, regarding the risks of being escrow while an intentional fork is happening.

How will you behave? I mean every exchangee or escrow is running into the risk of receiving coins on a chain that will turn out to be the losing chain. In worst case the other chain wins and you will stay with a bitcoin address on the other chain that is unfunded. So if there is no solution to that risk i would need to close my escrow service since i could not risk losing bitcoins on the wrong chain.

My thoughts about this so far are that i should be able to eradicate this risk by A) chosing the chain that i think will win, and run my wallet on that. And B) run a wallet on the other chain too AND import all the escrow addresses from Wallet A to Wallet B. Then once i receive a payment then i will check if i receive the coins on both addresses. Which would be true when the coins on the input address were there before the fork already.

If one chain's escrow address, doesn't matter which, did NOT receive the coins then i either refund the coins or i offer to send the same amount of bitcoins to the escrow address on the other chain. Only when i hold the bitcoins on both chains i can be safe. There would be no risk then anymore when the chain i have the bitcoins on will lose. Because i have the bitcoins on the other chain too.

What are your thoughts about?

[OgNasty]

Any of the big escrow names could just as easily take off with a large escrow, just as the recent MasterP thing happened.

I don't consider ~23 BTC all that big. It wasn't just one transaction, it was many small ones that added up to that amount.

I don't consider 23 BTC to be very big either.  As recently as in the last 60 days I was holding more than 700 BTC in escrow at one time for various trades.  Not a single issue...  Trade safely people.  I'm not the only trustworthy person around here, but I'd be real careful trusting an escrow without 3+ years of experience.

[OgNasty]

This is a question to other escrows, regarding the risks of being escrow while an intentional fork is happening.

What are your thoughts about?

Use Core.  Don't intermingle your coins with coins held in escrow.

[SebastianJu]

This is a question to other escrows, regarding the risks of being escrow while an intentional fork is happening.

What are your thoughts about?

Use Core.  Don't intermingle your coins with coins held in escrow.

That is the determination of someone who believes firmly in core. Though there is the possibility that miners chose to support a bitcoin client that creates 2 mb blocks. Which could turn into a mess when you still run core and suddenly your coins become worthless because a fork wins the majority and the old chains coins lose their value.

I'm really not ready to take such a risk. I mean it would be my error, at least if the users are not fully aware of me using a certain chain, and in worst case i had to refund a lot of bitcoins.

[redsn0w]

This is a question to other escrows, regarding the risks of being escrow while an intentional fork is happening.

What are your thoughts about?

Use Core.  Don't intermingle your coins with coins held in escrow.

That is the determination of someone who believes firmly in core. Though there is the possibility that miners chose to support a bitcoin client that creates 2 mb blocks. Which could turn into a mess when you still run core and suddenly your coins become worthless because a fork wins the majority and the old chains coins lose their value.

I'm really not ready to take such a risk. I mean it would be my error, at least if the users are not fully aware of me using a certain chain, and in worst case i had to refund a lot of bitcoins.

If you don't move the coin(s) during the fork, you will not lose nothing ...

[SebastianJu]

This is a question to other escrows, regarding the risks of being escrow while an intentional fork is happening.

What are your thoughts about?

Use Core.  Don't intermingle your coins with coins held in escrow.

That is the determination of someone who believes firmly in core. Though there is the possibility that miners chose to support a bitcoin client that creates 2 mb blocks. Which could turn into a mess when you still run core and suddenly your coins become worthless because a fork wins the majority and the old chains coins lose their value.

I'm really not ready to take such a risk. I mean it would be my error, at least if the users are not fully aware of me using a certain chain, and in worst case i had to refund a lot of bitcoins.

If you don't move the coin(s) during the fork, you will not lose nothing ...

Yes, that is for sure. But iam an escrow so i meet similar problems an exchange would meet on a much larger base. As long as i don't want to stop my escrow service once a fork started and only resume it once one chain completely lost, i would need to find a solution to still be able to act as an escrow while avoiding the risks of a forking blockchain.

[valkir]

Offering my escrow service.

Valkir

0.5%

Bitcoin and Alts

Available

[ANN]

Thanks

[bitpop]

Update: I no longer do escrows.

[Timelord2067]

Update: I no longer do escrows.

This popped-corn needs more salt... and a tad more butter...