How Blockchain Technology can be used in Escrow?
Nowadays, both technologies Blockchain and Bitcoin are growing in popularity. Bitcoin is known as a crypto-currency that is not backed by any country’s central bank or government, while Blockchain is known for being the foundational technology that enables Bitcoin. One of the fundamentals of Bitcoin is not having to trust any single party. Bitcoin is anonymous and transferable, and once it has been used, it permanently passes to the receiver and can’t be used again or withdrawn, the transaction is recorded onto the Blockchain and the data can’t be changed.
Escrow services are now a significant part in the field of Blockchain. Escrow acts as representative of a concerned account and its main duty is to help distribute money or documents as a neutral third party in different exchanges. Funds are frozen on the smart contract and are transferred only after agreed conditions are met and the operation has been confirmed by at least two parties. In the Blockchain technology these duty acting means bartering public and private keys to do their function as an escrow.
The Bitcoin escrow service acts as a neutral third party between buyer and seller. That is a good decision when transacting online with unknown or untrusted party, it will safely keep your funds in a deposit account to protect both the buyer and the seller. The money will be under control of an independent third party.
Blockchain Technology can be excellent decision for the areas where cost savings, security and trust can be improved.
For example, real estate market — that is possible to cut out a number of middlemen if you purchase or sell a house on the Blockchain. If you will use Bitcoin to buy or sell real estate, you can eliminate bankers, lawyers and brokerages from the chain. The use of Blockchain technology will help to get rid of intermediaries like escrow companies, in agreements between people, where a trusted third party is required.
Decentralized escrow is a new concept in the Blockchain technology, which provides a mechanism of control over the invested funds with the help of Blockchain and smart-contract. Investors will be able to participate in the project and control their funds by themselves in a decentralized manner, vote and decide whether to initiate the next stage of financing or not.
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