Double Deposit Escrow (DDE) preserves the peer-to-peer cryptographic currency protocol which made Bitcoin what it is today, yet takes Bitcoin a step forward and provides the tools needed for peers to interact in a trust-less marketplace environment. Anyone can send Bitcoins to another individual’s Bitcoin wallet, yet when it comes to transacting or exchanging goods, services, and other currencies for that matter, previously a ‘middleman’ has been required to conclude the process. Time and time again, this has created avenues for wrongdoers to take advantage of others’ trust. Some claim that over 40% of all Bitcoins in circulation have been obtained through theft. DDE solves this conundrum.
This escrow program is built into the client and requires no moderator or help of any kind from an outside source. The buyer and the seller deposit an agreed upon amount of collateral into the client’s escrow, that they deem worthy to keep each other honest until the transaction is complete. This amount can either be equal to to the value of the product or service in question or simply set to a custom amount. Once the transaction is completed and both parties are happy with the outcome, they – under their own will – release the collateral that is being held in a temporary address in the client. If something goes awry during the transaction, it’s up the buyer and seller, or employer and employee, etc., to work out their differences or they both lose their collateral. DDE forces the parties to work together and keeps the ‘crooked’ out of the equation because they cannot profit from wrongdoing with DDE.
The client adds an extra level of KYC (know your customer) protection with a built-in reputation system (mathematically unbiased) on top of the DDE protocol. This allows for merchants and their potential clientele or employers and their potential employees the ability to negotiate a custom value of DDE suitable to complete a contract if the counterparties feel themselves to be trustworthy. The choice is yours!
Currently most online marketplaces are based solely on a reputation system with the company host being the moderator and ‘profit-taker’. This has failed time and time again causing innocent merchants and shoppers to unjustifiably be banned. Other crypto-currencies are also building decentralized marketplaces, yet utilizing a 3rd party entities to enforce honesty. Except for the individuals directly involved in the transaction, it’s simply not possible to know who is at fault if something goes wrong or someone is dishonest. Also escrow agents can collude with a buyer or seller or even impersonate one to take funds out of escrow. When you consider that cryptocurrency is anonymous, that type of behavior must never be enabled.
BitBay’s Double Deposit Escrow solves this issue once and for all, which is why we believe it should be the industry standard.