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"Many people would offer their services as middlemen to provide escrow for trades, but over time there became an alarmingly high number of middlemen who would p

"Many people would offer their services as middlemen to provide escrow for trades, but over time there became an alarmingly high number of middlemen who would properly handle dozens or even hundreds of trades, then scam both parties simultaneously once they came across the biggest transaction of their life." This is impossible with a Bitcoin escrow contracts since 2 of the 3 parties need to agree to unlock the funds, and where to send them. And this is a perfect example of something that was literally not possible before Bitcoin (well, I suppose it could be done with some elaborate scheme with physical vaults and keys, but certainly not on the internet)

scoldstorage 13y ago
The Great 420 Scam | All Things VICE http://allthingsvice.com/2012/05/30/the-great-420-scam/ http://allthingsvice.com/2012/05/30/the-great-420-scam/ Theoretically people weren't supposed to store their bitcoins in an exchange like MtGox either but here we are today with this mess. The bitcoin protocol and best practices suggest a lot of actions that just don't work due to human nature
dllthomas 13y ago
It's not quite impossible - to defeat 2 of 3 signatures, you just have to be 2 of the parties to the transaction. In this case, if I've built a massive reputation as a fair escrow agent, I can then pose as a seller of something(s) expensive. Once the money is escrowed, I release the funds and disappear. Having 2 of 3 signatures for escrow is certainly a better situation, though, presuming it doesn't lead to a false sense of security.