How to Create Safer Business Contract with Decentralized Escrow. Escrow is a trust creation process in which a third-party mediator controls funds or documents during the transaction. The essence of custody is to establish trust by transferring. The control of relevant information, documents, or funds to a neutral third party in a commercial transaction. So as to eliminate the possibility of one entity’s breach of contract.
This prevents the seller from receiving payments without providing goods or services for sale. On the buyer’s side, this eliminates the possibility of acquiring assets or services without paying the seller. The contract that outlines the conditions of the commercial agreement is usually in the hands of the escrow agent to prevent any party from manipulating the contract.
An important role of the escrow agent is to verify the identity of the parties and verify the real legal ownership of the seller. In many industries, the big problem that facing is fraud and escrow agents. Often spend time investigating legal documents to ensure that everything is accurate. This type of service is very important because computer software allows the creation of fake files.
In practice, the company or escrow agent charges a fee based on a percentage of the sales value. These fees include various fees for providing escrow, such as insurance. Time spent in transaction processing, fees associated with transferring funds, and fees for accessing and modifying legal documents.
Commercial transactions that guarantee the use of escrow agents are usually complete to slow. Because it is well known that legal and public file systems are slow, and for large transactions. Escrow agents need to complete more complex documents and verifications.
Double Deposit Escrow (DDE)
No longer needs to wait a long time to complete your business transactions when the escrow is complete. The DDe system will make it easier for you and other parties to negotiate custody and contract conditions before reaching an agreement.
Backed by the power of a secure and decentralized network. Attempts to use this system for hacking or manipulation will not easily succeed. This also means that there is no middleman to pay or trust your money. This eliminates the possibility of someone manipulating the contract because the conditions of the agreement cannot easily change.
Smart contracts will adhere to the peer-to-peer market to avoid the risk of dishonesty and high fees for each transaction. We are proud of our DDE system and the security it provides through smart contracts.
Blockchain Custody Block
With the use of chain technology, decentralized custody may completely change the way in which trust is establish in commercial transactions. The decentralized custody system. As the name suggests is a digital agreement any controlling a trust that is not affecting that form third party or intermediary.
Open blockchain-based smart contracts are the driving force behind decentralized custody, and their existence is very important. The use of decentralized custody allows cryptocurrencies to act as peer-to-peer collateral.
A smart contract is task-orient computer code, which guarantees that the task is complete in a certain way. Otherwise, the offender will face consequences. One of the breakthrough aspects of smart contracts is that they are execute automatically and make the business conditions of the relevant personnel highly transparent.
There is no need to interact with anyone or pay fees to execute and monitor create safer business contract agreements. Since cryptocurrency is use for decentralized custody. The cost is greatly reduce, because it is much cheaper to transfer funds using cryptocurrency, and there is no need to pay agents. Through decentralized escrow accounts, funds are not in one person’s hands. But, controlled by smart contracts. Hacking will very difficult because smart contracts are backed by the security provided by the blockchain network and consensus algorithms.
The term “trustless” is often use in smart contracts because they eliminate the need for trust in commercial transactions. This element also means that there is no legal system that can use to resolve violations of the agreement. The irreversibility of a cryptocurrency transaction means that once a payment is made, it cannot reverse. This is what might attract people’s interest in crypto investing, which makes the popularity of cryptocurrency trading increase.
Room for improvement
Although fraud prevention is one of the reasons for the creation of a hosting company, there are still many examples of fraud that actually occur under the guise of hosting. The scammer tried to convince both buyers and sellers that they were a trusted third party, only to disappear with the customer’s money or assets. Escrow companies may fool about the true identities of their customers, or they may manipulate into remittance scams, resulting in funding sent to the wrong person.
To make matters worse, the escrow agent may collude with the other party and use you. The fees charged by these intermediaries should also check. Hosting companies seem to be a good choice, as the rates are usually single-digit percentages.
If one person defaults, the other party may fall into financial distress and the assets will be locked up until the long and complicated legal process is completed. Waiting for their money to be recovered financially can be devastating for individuals and small companies. Because they have to wait too long to get the money.
Although all the above explanations are very clear, to make an agreement in the escrow system, you have to go through a long process to complete. Therefore, the existence of these complaints made many people think of solutions. One of them is decentralized hosting which will continue to develop for the better. It’s only a matter of time to make improvements to create a safer business contract.