“Businesses and users are going to use technology only if they can trust it”. – Satya Nadella
An escrow is a financial consent where a mediator holds and balances deposits of the funds essential for the two teams taking part in a given transaction. It is useful because it makes the transactions secure and guards them by keeping them in an escrow account and are only released when all the terms and conditions of the agreement are attained.
Escrow Accounts can prove to be very useful in cases where a huge amount of deposit is involved. Example, if you want to design a website, you being the buyer will need to make sure that the character of the work is good before making a full payment. Likewise the seller will make sure that he doesn’t have to work too hard without the guarantee of getting the reward for it. Here the traditional escrow accounts might not help too much because they are difficult to process and require the interference of banks and lawyers. On the contrary, online escrow accounts provide services at satisfying rates. In this way transactions become secure because the payment is in the escrow account. There is no risk of extortion or any risk of losing money. This results in confident buyers and sellers.
One of the concepts used in escrow is termed as secret splitting. This works when you acquire important information and share it with parties that you trust. The information can be a password, the details of a bank account, or access to any data and more. No one can get access on their own. The only way to get to it is through a collective agreement. But it has some fragile spots also. If one team loses access to the information and has no link with the other teams to make an agreement or compromises themselves and loses trust, there is no way to restore it. In this case a threshold scheme can help. Threshold scheme is an enhanced version of secret splitting. There are no restrictions in this scheme.
Safety remains at the top of the priority list of any customer. Now, are escrow accounts safe? Mathematics and cryptography prove its authenticity. A lot of mathematicians and cryptographers have advanced algorithms in order to make escrow accounts secure. To avoid complicity, of some parties a scheme was mastered, where others are able to cancel the decisions of others. If some party tries to play foul, its efforts can be put into vain.
Although Escrow accounts are safe, complexity of operation bothers a lot of people. The described schemes and models are a little more complicated than they look like. You might even need an expert in cryptography and mathematics almost all the time. Furthermore, incorrect application can prove to be very costly.
“Mary has a crypto key, she kept it in an escrow, and everything that Mary said, the feds were sure to know”. – Sam Simon.
Escrow accounts are spreading its wings in the block chain world also. In a blockchain if the private key is lost, all assets linked with the paired wallet are also lost. The funds cannot be transferred into any other wallet because when a key is merged with the wallet, transactions cannot be verified. So, protecting a key is incredibly important. Other option to a single private key is the procession of multiple keys and have those keys protected separately.
