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Bitcoin allows transactions that only become valid once 2 of 3 people sign them. If the three people are buyer, seller, and arbitrator, you can have escrow without trusting a third party. There have already been commercial services along those lines.

Seems to me that any dark service that doesn't do it that way probably shouldn't be trusted.



The article mentions that Evolution provides such a service, but it didn't get heavily used. Quoting from the article

>That system, would require at least two out of three parties in a transaction—the buyer, the seller, and Evolution’s administrators—to sign off on a deal. But due to its complexity, buyers rarely used the feature.

Edit: apparently this does not use bitcoins version of it, but their own that requires them to hold the funds in escrow. Which seems pretty stupid.


Once again user experience trumps security


>arbitrator

Is the arbitrator not a third party?


Not one that you need to trust.


You need to trust either the buyer or the arbitrator actually. In this case some money might have been lost due to malicious buyers (and the absent arbitrator).


You have to trust the arbitrator to make fair decisions, but the arbitrator has no ability to steal the money.

The transaction simply moves funds between buyer and seller. If buyer and seller both sign the transaction, it completes without the arbitrator's involvement. If buyer and seller dispute, then the one who hopes to complete the transaction signs it and contacts the arbitrator, who will either sign, or not sign, but either way never gets possession of the funds.


If both the buyer and the arbitrator are anonymous, how do you know that they aren't the same person?


They're actually pseudonymous, so they can have reputations. If the other party insists on an arbitrator you've never heard of, you probably shouldn't agree to those terms.


The arbitrator will usually be known by reputation, i.e. always the same key id.




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