<p>Bitcoin escrow schemes that don't require a third party typically don't require a third party because that is one of their design requirements. It's obviously much easier to design an escrow system that does require a third party, so typically you would only design one that didn't if you had no choice.</p>

CC BY-SA 3.0
2013-04-23T04:35:01.710Z
Makes sense to me. But now what is the point of bitcoin money in an exchange if it doesn't solve the problems the third party solve ? I mean I get why the bitcoin want to get rid of the third party, but if it doesn't solve the problems the third party solve, what is the point ?
Sebastien FERRAND
CC BY-SA 3.0
2013-04-23T04:36:14.573Z
@SebastienFERRAND: The point is to provide some of the advantages of escrow without needing a third party. For example, it can ensure the buyer has the funds, ensure the buyer keeps the funds until the time of purchase, impose a cost on the buyer for not releasing the funds, prevent the seller from getting paid before delivering, and so on.
David Schwartz
CC BY-SA 3.0
2013-04-23T04:55:12.780Z
"impose a cost on the buyer for not releasing the funds, prevent the seller from getting paid before delivering, and so on" - How bitcoin is providing these services ? As a bitcoin user, all I see is a possibility to instantly send money to someone else in the world. How is it imposing a cost on the buyer if he doesn't release the fund ? and how is it preventing the seller from getting paid before delivering ? Sorry if it looks really silly to you ...
Sebastien FERRAND
CC BY-SA 3.0
2013-04-23T07:51:13.430Z
I think I got it. We're talking about hand-to-hand sale, not online sale. Bitcoin alows to do a numeric payment in a real world deal, for example I pay my friend alex for the video game he just put in my hand, and he can check it quickly without a third party. What bitcoin system doesn't do is providing a safe third party free system for online sale, like buying a video to a japanese guy while I'm in France for example.
Sebastien FERRAND
CC BY-SA 3.0
2013-04-23T04:02:09.883Z
2013-04-23T04:02:09.883Z
David Schwartz
<ul>
<li>Escrow is not a feature of Bitcoin.</li>
<li>You don't need escrow for the Bitcoin part. You could need escrow for the USD part if you buy Bitcoins for USD, but not for the Bitcoin part.</li>
</ul>

CC BY-SA 3.0
2013-04-23T03:26:31.813Z
`escrow is not a feature of bitcoin` [Uhh, yes it is.](https://en.bitcoin.it/wiki/Contracts#Example_2:_Escrow_and_dispute_mediation)
Nick ODell
CC BY-SA 3.0
2013-04-23T03:54:50.243Z
Yeah ok but let's say I know nothing about it; I read bitcoin is a solution to remove the third party from online exchange : How does it solve the problem of proving that the seller sent the merchandise before he gets the money ? I kinda need a new be explanation, as I'm doing my firsts steps on the subject.
Sebastien FERRAND
CC BY-SA 3.0
2013-04-23T04:58:31.963Z
See [the example](https://en.bitcoin.it/wiki/Contracts#Example_2:_Escrow_and_dispute_mediation). (If you want to do it without a third party, the rule could be that the first party gets the funds if time runs out or it could be that the funds are trapped in escrow forever.)
David Schwartz
CC BY-SA 4.0
2018-11-11T20:25:51.947Z
What is "USD"? US Dollar?
yaobin
CC BY-SA 3.0
2013-04-23T03:18:51.770Z
2013-11-29T18:45:48.387Z
2013-11-29T18:45:48.387Z
neofutur
<p>I've read this article: <a href="https://bitcoin.stackexchange.com/questions/9085/what-are-routine-escrow-mechanisms">What are &quot;routine escrow mechanisms&quot;?</a></p>

<p>But I don't understand the bitcoin escrow system.</p>

<p>Can anyone explain me how this escrow system doesn't need a third party ?</p>

<p>Edit : How is solving problems the third party solve in online exchange ?</p>

CC BY-SA 3.0
2013-04-23T10:36:37.977Z
Escrow has several uses, not just having a third party arbiter in a sale.
CodesInChaos
<escrow>
Why don't bitcoin escrow transactions require a third party?
Sebastien FERRAND
# Why don't bitcoin escrow transactions require a third party?

(Asked by: username_0 on 2013-04-23)

I've read this article: [What are "routine escrow mechanisms"?](https://bitcoin.stackexchange.com/questions/9085/what-are-routine-escrow-mechanisms)

But I don't understand the bitcoin escrow system.

Can anyone explain me how this escrow system doesn't need a third party ?

Edit : How is solving problems the third party solve in online exchange ?

**Tags:** escrow

> **Comments:**
> **username_1**: Escrow has several uses, not just having a third party arbiter in a sale.  

---

## 2 answers

### Answer by username_2 on 2013-04-23. Score: 2

Bitcoin escrow schemes that don't require a third party typically don't require a third party because that is one of their design requirements. It's obviously much easier to design an escrow system that does require a third party, so typically you would only design one that didn't if you had no choice.

> **Comments:**
> **username_0**: Makes sense to me. But now what is the point of bitcoin money in an exchange if it doesn't solve the problems the third party solve ? I mean I get why the bitcoin want to get rid of the third party, but if it doesn't solve the problems the third party solve, what is the point ?  
> **username_2**: @username_0: The point is to provide some of the advantages of escrow without needing a third party. For example, it can ensure the buyer has the funds, ensure the buyer keeps the funds until the time of purchase, impose a cost on the buyer for not releasing the funds, prevent the seller from getting paid before delivering, and so on.  
> **username_0**: "impose a cost on the buyer for not releasing the funds, prevent the seller from getting paid before delivering, and so on" - How bitcoin is providing these services ? As a bitcoin user, all I see is a possibility to instantly send money to someone else in the world. How is it imposing a cost on the buyer if he doesn't release the fund ? and how is it preventing the seller from getting paid before delivering ? Sorry if it looks really silly to you ...  
> **username_0**: I think I got it. We're talking about hand-to-hand sale, not online sale. Bitcoin alows to do a numeric payment in a real world deal, for example I pay my friend alex for the video game he just put in my hand, and he can check it quickly without a third party. What bitcoin system doesn't do is providing a safe third party free system for online sale, like buying a video to a japanese guy while I'm in France for example.  

---

### Answer by username_3 on 2013-04-23. Score: 0

* Escrow is not a feature of Bitcoin.
* You don't need escrow for the Bitcoin part. You could need escrow for the USD part if you buy Bitcoins for USD, but not for the Bitcoin part.

> **Comments:**
> **username_4**: `escrow is not a feature of bitcoin` [Uhh, yes it is.](https://en.bitcoin.it/wiki/Contracts#Example_2:_Escrow_and_dispute_mediation)  
> **username_0**: Yeah ok but let's say I know nothing about it; I read bitcoin is a solution to remove the third party from online exchange : How does it solve the problem of proving that the seller sent the merchandise before he gets the money ? I kinda need a new be explanation, as I'm doing my firsts steps on the subject.  
> **username_2**: See [the example](https://en.bitcoin.it/wiki/Contracts#Example_2:_Escrow_and_dispute_mediation). (If you want to do it without a third party, the rule could be that the first party gets the funds if time runs out or it could be that the funds are trapped in escrow forever.)  
> **username_5**: What is "USD"? US Dollar?  

---

