Author: Andrés G. Aragoneses 2021-02-11 15:02:26
Published on: 2021-02-11T15:02:26+00:00
ZmnSCPxj suggests a new twist to the old idea of having an escrow service for Bitcoin exchanges. He proposes inverting the logic and making two payments of the same amount, one from the seller to the buyer claimable by the buyer and escrow key, and the other from the buyer to the seller claimable by the seller key. The ritual involves the seller handing over the item, and the buyer deciding whether to accept or complain to the escrow. If the buyer is satisfied with the product, they fail the seller-to-buyer payment after the seller claims the buyer-to-seller payment, and the seller is paid and has no more obligations. If the buyer is dissatisfied, they can ask the escrow to judge, and the escrow will reveal the escrow key to the buyer, who can then clawback the payment to the seller if the escrow judges in their favor. If the escrow judges in favor of the seller, they delete the escrow private key, and the seller-to-buyer payment eventually times out, ending the obligation of the seller. ZmnSCPxj notes that this method requires twice as much Bitcoin getting locked but provides a simple buyer and escrow keypair that gives the seller a proof-of-refund. He also mentions that existing systems like Bisq have a similar problem, where the buyer of Bitcoin has to have a small amount of Bitcoin to offer as stake that can be revoked in case they attempt to defraud the counterparty. ZmnSCPxj suggests that in the later stable state, parents will provide children with the initial stake needed for them to start transacting over such a system, just as they already provide their children with other "initial stakes" (education, food, shelter, etc.) anyway. ZmnSCPxj also acknowledges that this method is difficult to implement without PTLCs and suggests using dual-hash HTLCs as an alternative, which would be helpful in other escrow-related cases including escrow-facilitated cross-currency swaps. However, he notes that PTLCs is the preferred method and is required for this particular method.
Updated on: 2023-06-02T18:50:05.870649+00:00