🤝Escrow
What is an Escrow system?
The biggest problem encountered in online commerce are scams.
Escrow services are intended to ensure the security by acting as an intermediary in transactions where the two parties do not trust each other.
An Escrow is an arrangement for a third party to hold the assets of a transaction temporarily.
The assets are kept in a third-party account and are only released when all terms of the agreement have been met.
The use of an escrow account in a transaction adds a degree of safety for both parties.
How Does a classic Escrow Work?
- buyer and seller agree with each other and establish the terms of their transaction;
- buyer sends the money to the third party
- the third party verifies payment and notifies seller that the amount has been received;
- seller ships the goods or performs the service requested by buyer and sends information regarding the tracking of the goods;
- the buyer accepts the goods or service and notifies the third party
- the third party release founds to seller.
Problem about this method:
1 - Finding a partner that is trusted by both of them it's not always possible due to distance or time
2 - Costs: normally those who do this service are very expensive (Notaries, Banks etc..)
3 - There are few middlemans who accepts cryptocurrency
How Does Our Escrow Work?
We replaced the third party with a smart-contract that is executed by the blockchain.
As we know, the smart contract is a program that once created and saved on the blockchain cannot be modified by anyone.
This will behave according to the instructions within it, which will be those that are established according to the agreement between the two parties.
Advantages:
1- The smart contract can be trusted by both because there is no way to alter it
2- It is always available 24h/365 days
3- Significantly lower costs than traditional systems (no staff to maintain etc...)
Workflow:
- Buyer and seller agree with each other and establish the terms of their transaction;
- The smart-contract is generated and written to the blockchain
- buyer sends the money to the smart contract
- Seller can verify payment directly online because the smart contract is public.
- seller ships the goods or provides the service requested by the buyer and sends the information regarding the tracking of the goods;
- the buyer accepts the goods or service and confirms the goodness of the transaction
- The smart contract releases the funds to the seller.
The price of this service? Only 1% of the total transaction using the BTSCRW token.
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