Silk Road forums
Discussion => Newbie discussion => Topic started by: GridtownVan on August 23, 2013, 10:20 am
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I've been researching SR for a couple of days and I keep hearing the term escrow brought up. What is it, and how I make sure I use escrow? Is it automated?
Forgive my ignorance, I searched the forum for escrow and got nothing but spam.
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Escrow is the system that was put in place in order to protect both buyers and sellers. Think of it like this, you want to buy drugs but you don't know if you can trust the person you're buying from...soooooo, you hand your money to a trusted friend (the sites escrow system). Escrow holds on to it until you get your stuff, then you release the fund. Technically, you have 17 days to release the funds (aka FINALIZE your transaction) but you will learn that it's common courtesy to release them immediately after you receive your product. Most vendors get pissed when our funds are held up in escrow.
-Judge
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I see. Thanks Bud.
Is that all handled through SR or do I need to register with another site that does the bitcoin handling?
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Escrow is the service that SR applies for you. Its the main reason it makes money. Vendors pay SR upto 10% of sales for this service.
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It is mostly automatic. First things first, you send BTC to your SR wallet from whatever funding source, the amount available therein can be seen at the top of the page. When you place an order, the amount of the order in BTC is removed from your wallet and placed in an escrow account (i.e. held for the seller by SR and not available to either party) until such time as you receive your product, or in the case of a problem, a resolution is agreed to. After the seller marks your shipment "in transit" or shipped, an option will appear on your order page to "finalize", that is, release the funds to the vendor.
Here's the most important point for a newb, one that you will hear ad nauseum: don't touch the finalize button until you've got the goods in hand and all is satisfactory. Once you release payment, the order is considered finished and you have given up any chance of recovering any funds in the case of a scam. The most common red flag for a scam is being asked to FE (finalize early) before you have received your order. As a new user you are a target for this, as legitimate vendors do have reason not to trust you with expensive product without any past history to decide whether to sell to you or not. Vendors do not have to sell to anyone they'd rather not, and it isn't against the rules to ask for FE.
The escrow/resolution system actually works very well and almost all scams are enabled by FE'ing.
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You'll find many sites offer this kind of protection - freelancing websites, sites listing expensive goods, etc. It's a standard term, but it just means somebody else holds the money until both parties are satisfied.
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Here's the most important point for a newb, one that you will hear ad nauseum: don't touch the finalize button until you've got the goods in hand and all is satisfactory.
Ahhhhh! I was going to mention this but decided to let someone else step up to the Mic.
-Judge
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Thank you so much unbeknownst. I totally understand it now. I guess when people say stuff like "be sure to use escrow", it's to avoid purchases outside of the SR system where it's easier to be scammed.
I thought escrow was software company. How silly of me.
Good to know about the FE as well. Will keep that in mind.