I understand what multisig is (2 signatures out of 3 required to release funds, market holds one), but I don't exactly comprehend how the market can't touch the funds. If it goes out of your local wallet to the market wallet, in which you enter multisig mode with the vendor, how can't the market take the coins when it's in your market wallet? Or would you pay directly out of your local wallet to the multisig mode?
I understand there is /r/darknetmarketsnoobs but you guys seem more qualified to answer it. thanks
You're very unlikely to ever see true multisig on these markets. Why? Because the markets can't guarantee to take their cut.
Think about it... If the buyer and the vendor decide they don't want to pay x% fees, what can the market do about it?
If I want to send a vendor 1.0 BTC with a fee of 5%, that's a total of 1.05 BTC.
Suppose I was nice enough to FE
Vendor got full amount, so they're happy, and I got my fees back, so I'm happy too. The market is of course pissed but the 2 of 3 system allowed it to happen.
3 of 3 doesn't guarantee it either either because I could still decide (after the vendor's been paid) that I don't want to pay my fees, the only difference is that I don't get them back, the bitcoins just sit there sticking their tongues out at everyone.
The markets will always want an override so that they can guarantee to get their cut, but as soon as you implement that override, it's no longer true multisig.