Bitcoin Escrow Script – A Script that helps to build a secure crypto ecosystem via a website, where a buyer and seller can fastly transact their bitcoins without any pitfalls. Bitdeal, a bitcoin exchange & Blockchain development company, that helps startups to initiate bitcoin escrow services like bitraded, escrowmybits, localbitcoins,setescrow,bitify and etc.
WHAT IS BITCOIN ESCROW?
Bitcoin Escrow is a Service, that helps to build a secure cryptocurrency eco world, with increased transaction speed, trust & security by protecting both buyer and seller from scams. Escrow is already exist in other financial systems, especially in banking. The concept works as same in bitcoin industry too.
HOW DOES BITCOIN ESCROW WORKS?
Escrow mediates fund transaction between a buyer and a seller. Whereas the escrow may be a third party admin. Nowadays smart contracts have replaced the need of admins.
In tradtitional bitcoin trading/exchange/ transaction a buyer may request a seller to send bitcoins for the money which he/she has. The seller receives money from the buyer through a medium, and he provides a product, service or bitcoin to the buyer after verifying the received payment.
In some exceptional cases, the seller may abscond after receiving payment, and in some cases, the buyer may abscond without sending the payment. If this happens, outside of an exchange both sides may be left as helpless and will result in huge losses also they can’t legally pursue a case as bitcoin is decentralized.
The Escrow Works as Below
1. Buyer and seller signs an agreement in the governance of admin for what they are going to transact with each other.
2. The agreement would consist of every single detail about the transactions, which includes money, time and etc.
3. After the agreement processed, The seller sends bitcoins to the admin wallet.
4. And the buyer will be notified via email or a message about the seller have deposited bitcoins.
5. After the notifications received buyer sends payment to the seller.
6. The seller checks payment and will instruct the admin to release funds to the buyer
7. The contract gets closed after the buyer receives bitcoin from the escrow admin
you may ask three questions…
1. What if the escrow admin steals my bitcoin as we are storing bitcoins inside a third party wallet?
2. The above scenario and workflow is for buying bitcoins from the seller, So what if the buyer purchases a product from an online shopping store. The above escrow flow powers the seller side alone, as he made the final decisions to release bitcoins. If the buyer receives product/service from online store by sending bitcoins then who has the high authority to make decisions and how escrow will secure a buyer?
3. How escrow will help both sides if the received service/ product is not the same as mentioned in the contract/agreement
Read this blog below to get detailed information about the above three consequences
Originally Published on : Bitdeal Escrow Script To Start Bitcoin Escrow Service As A Business