[HN Gopher] How to Build an Escrow Product
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How to Build an Escrow Product
Author : qin
Score : 104 points
Date : 2021-01-21 15:15 UTC (7 hours ago)
(HTM) web link (www.moderntreasury.com)
(TXT) w3m dump (www.moderntreasury.com)
| Icedcool wrote:
| These are being built directly into ethereum and cardamom now.
| aantix wrote:
| Are there any licenses needed to be an escrow?
| koraleurke17 wrote:
| It will be interesting to see when Cardano implements Marlowe for
| non-coders to implement contracts such as Escrow and Bonds
| without a trusted third-party.
|
| https://alpha.marlowe.iohkdev.io/#/
| jawns wrote:
| I would love to see escrow expand from the realm of high-value
| purchases to more modest transactions, because it's a pretty good
| way to promote good conduct online. (Full disclosure: About 12
| years ago I built a startup that would do this, but it never took
| off.)
|
| Imagine signing up for a social-media account that requires a
| small amount of money -- say $1 to $10 -- be put down as a type
| of security deposit. If, during your first X days of activity on
| the site, you flagrantly violate the terms of use (e.g. by
| spamming lots of other users) you lose the money; otherwise it's
| returned to you.
|
| If such a system were to become commonplace, it would introduce
| only a minor amount of friction for most legitimate users, but it
| would become a great impediment to spammers and other malicious
| users.
| ihaveajob wrote:
| The use case I had in mind when I thought about escrow services
| not long ago is website trading. I assume the big players have
| something in place for the domain name part, but there's much
| more to it when you're transferring an entire service
| (accounts, documentation, etc). If you're going to pay $5k for
| a website, spending a $100 fee to make sure everything goes
| smoothly is probably reasonable.
| jasonpeacock wrote:
| You are making multiple assumptions about "legitimate users",
| which biases against various groups:
|
| 1. They have (or are willing to use) an online payment source
| (credit card, paypal, etc.).
|
| 2. They have (or are willing to spend) a disposable income.
|
| 3. They trust you to get their money back.
|
| Also, you're going to deal with a huge amount of customer
| service as every single person argues with you that they didn't
| violate the terms and deserve their money back - that's going
| to cost way more than any fees/interest you'd earning from the
| escrow.
| theptip wrote:
| I don't think this would work for a normal social network (e.g.
| Facebook); as sibling commenters mention it adds a lot of
| friction.
|
| However I think this is a great idea to explore for "exclusive"
| / "high value" forums, say for trade / special-interest groups.
| I'd be happy to put down a $10 stake to participate in
| something like Hacker News, for example, if that would help to
| combat astroturfing and bad behavior. (Honestly for how much I
| post on HN I'd be prepared to stake more.)
|
| There's been a lot of research done in this area by the
| Ethereum devs under their migration from "Proof of Work" to
| "Proof of Stake", including research on the game-theory of
| "slashing conditions" (i.e. when you lose your stake). You get
| some cool community-policing possibilities by allowing any
| member of the community to collect a bounty paid for by
| claiming part of the forfeited stake, if they can present an
| example of a member breaching the rules. For something
| requiring review this would perhaps have less benefits, but
| could still be useful; rather than moderators having to watch
| every message go by, they would just look at the "flagged"
| queue, and users would now have a financial incentive to add
| something onto the flag queue, perhaps also having to pay a
| small amount to take that action as well, to disincentivise
| spamming "flag" entries. I'm sure you could build this all on
| Ethereum if you were so inclined, with "admin moderation" being
| a call to an external trusted Oracle service where the
| moderators live.
|
| Of course there are also substantial risks in turning a system
| based on community goodwill into a financial game; people
| behave differently when they are purely optimizing for a
| financial game vs. when they are not.
| rahimnathwani wrote:
| I'm not sure I understand the example you gave:
|
| 1. What purpose would escrow serve in this example? The user
| trusts the social media site, and the amount is small (like
| $1). So there's no need for a third party to hold/control the
| funds and determine when they are released to one party or
| another.
|
| 2. A spammer can just wait until day X+1 to start spamming.
| roywiggins wrote:
| Metafilter has a $5 signup fee, which works in approximately
| the same way. If you get kicked off for spam (or any reason,
| really) you're out the $5.
| mbesto wrote:
| Why haven't crypto smart contracts satisfied this yet? They've
| been talking about it for years, but I have yet to see
| substance for it...
| _z1234 wrote:
| Algorand has...
|
| https://community.algorand.org/blog/utilizing-algorands-
| asc-...
| zacharycohn wrote:
| See: something awful forums circa 200....4?
| clairity wrote:
| a potential reason your startup didn't take off:
|
| "If such a system were to become commonplace, it would
| introduce only a minor amount of friction for most legitimate
| users..."
|
| first, that doesn't sound like minor friction, but more
| importantly, even seemingly small friction can lead to large
| abandonment, especially if frictionless alternatives are
| readily available.
|
| banks _love_ (large) escrow products by the way. super-low
| risk, low effort, and very reliable fee income for them.
| xcambar wrote:
| From the top of my head, I can mention 2 (local, EU) examples:
| * https://ebay-kleinanzeigen.de * https://leboncoin.fr
|
| Interestingly, both are platforms for individuals to sell goods
| to other individuals. And both internalized the feature (no
| apparent 3rd party involved).
| kodah wrote:
| The Keybase Wallet that is basically a proxy for Stellar Lumens
| does this for "trustlines" in order to exchange between
| currencies and various coins. The only difference is that it's
| durable for the duration of your use of the trustline.
| chin7an wrote:
| Metafilter.com has a $5 one time sign up fee and a waiting
| period for similar reasons. That discouraged posting useless
| questions that plagued Yahoo Answers. Used to be a good, useful
| website a few years back but rarely comes up in results these
| days, maybe because Quora is free and drives more traffic or
| better SEO!
| brightball wrote:
| I've often wondered about something like this for eBay to make
| transactions more trustworthy.
| elietoubi wrote:
| Hey! My name is Elie and I am the CEO of carbon payment ... I
| used to lead one of the payment team at Uber and I am working
| something similar... let's chat
| loceng wrote:
| I feel the type of user who'd buy into this would also be the
| type of user who'd simply be willing to contribute a small
| amount monthly to pay towards moderation, etc.
| hervature wrote:
| If anyone has resources with regards to any certification
| requirements for different countries but primarily USA/Canada
| before becoming an escrow service, that would be highly
| appreciated.
| thisiswarry wrote:
| fun fact: escrow comes from the french word "escroc" which means
| crook. words, am I right ?
|
| well, TBH both comes from the same word, not directly related.
| still, fun to see how the same words can end up having exact
| opposite meanings.
| mytailorisrich wrote:
| "Escroc" in French comes from "Scrocco" in Italian [1]. No
| relation with escrow.
|
| [1] https://unaparolaalgiorno.it/significato/scroccare
| Kydlaw wrote:
| Being french and not knowing the definition of "escrow", I
| associated it with crook indeed ! Also at the first reading of
| the title I read "escort product". Thought, "ho woah HN! what
| is going on?" :)
| tylerrobinson wrote:
| > The word derives from the Old French word escroue, meaning a
| scrap of paper or a scroll of parchment; this indicated the
| deed that a third party held until a transaction was completed.
|
| https://en.wikipedia.org/wiki/Escrow
| _z1234 wrote:
| It still remains that the transaction has a trusted 3rd party,
| this is not revolutionary. Algorand can solve this without a
| trusted 3rd party.
|
| https://community.algorand.org/blog/utilizing-algorands-asc-...
|
| https://developer.algorand.org/docs/build-apps/apps/#escrow-...
|
| Super easy for developers to get started with too:
| https://developer.algorand.org/
| alexchamberlain wrote:
| I think the trusted 3rd party is essential to these
| transactions. At least in the UK, the conveyancers aren't just
| providing escrow or legal services, but also a professional,
| guiding voice through the transaction as a whole.
| orliesaurus wrote:
| Looks like a great use-case for Stripe Treasury API!
| terrynaidu wrote:
| www.truzo.com
|
| unfortunately banks charges relating to payments govern the cost
| of an escrow service hence it makes more sense for larger value
| transactions
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