User:Casascius/Escrow scheme draft
This is a draft for a three-party or four-party scheme that enables an escrow transaction using nothing more than standard (non-multi-signature) Bitcoin transactions. This proposal contemplates the following features:
- One shared Bitcoin address for the entire transaction
- All parties to the transaction can verify that the Bitcoin address belongs to the transaction they're participating in, and not one made up or taken from someone's own personal wallet
- Escrow agent can control the disposition of the funds but cannot take the funds
- Releasing the funds remains possible even if the escrow agent disappears
The proposal contemplates up to four roles, defined as follows:
- B - Beneficiary Bob - Bob is the person providing the goods or services, and who will receive control the proceeds of the transaction if there is no dispute and the goods or services are delivered as promised.
- A - Alternate Beneficiary Alice (or Customer Alice): Alice is the person who will receive the proceeds of the transaction if either the Bob or the Escrow Agent decide that the funds should not go to the Beneficiary. Alice might or might not be the customer who is paying into the escrow transaction. If Alice is the customer, then allowing the funds to go to Alice constitutes a refund. If Alice is not the customer, then Alice is an alternate beneficiary who may be granted access to the funds by the Escrow Agent in the event they determine it should not go to Bob, and might be a person more able to settle a dispute than anyone else.
- E - Escrow Agent Eddie - This person gets the power to award control of the funds to either Alice or Bob if the two of them cannot agree who amongst themselves should get the funds.
- C - Customer Charlie (optional) - If Charlie is a party to the transaction, then Charlie is the person paying into the escrow account with no hope of receiving a refund. Charlie has the power to grant the proceeds of the funds to Bob or Alice, but only if the Eddie doesn't do it first. Charlie can also verify, with the help of a tool, that he is paying into an account under the control of Bob, Alice, and Eddie, rather than into someone's personal wallet.