Core Concept

How the Escrow Works

Traditional trust model vs Smart contract escrow

In traditional escrow, you send your money to a company (like Escrow.com or a bank). They hold it in their account, review the work, and decide when to release it. You're trusting them to:

  1. Keep your money safe

  2. Make fair decision

  3. Not go out of business

  4. Process payment quickly

  5. Charge reasonable fee

Problem: You're replacing "trust between strangers" with "trust in a company." You still need trust.

Smart contract escrow like dotEscrow, your money goes into the blockchain, where it is automated to follow strict rules that were agreed upon when created.

  1. IF client approves -> THEN release funds to freelancer

  2. IF both party agrees to cancel -> THEN return funds to client

  3. IF disputes flagged -> THEN lock funds till dispute is resolves

Advantage: The code can't change its mind, play favorites, or steal your money. It just follows the rules, every time, automatically.

The role of blockchain in securing funds

Think of blockchain as a giant, public ledger that thousands of computers maintain together. When you lock funds in .escrow's smart contract, here's what blockchain provides:

  1. Permanent record: Your transaction is written into a "block" and chained to all previous blocks. It can't be erased, edited, or hidden.

  2. Public Verification: Anyone can check that your $5,000 is actually locked in the contract, including the freelancer you hired.

  3. No Single Point of Control: No one person or company can access the funds. The contract code controls release, and that code is enforced by thousands of network nodes.

  4. Tamper-Proof: To change your transaction, someone would need to hack thousands of computers simultaneously, effectively impossible.

The Security Promise: Once funds are locked in the smart contract on the blockchain, they're secured by math and distributed consensus, not by trusting any single company or person.

How both parties are protected

dotEscrow protects both clients and freelancers through a three-way shield:

  1. Clients are protected from paying for work they never receive or that doesn't meet agreed standards

  2. Freelancers are protected from doing work and never getting paid

  3. Both are protected by transparent, automated rules that no one, not even dotEscrow can override.

The key: Neither party can unilaterally take the money. Funds only move when conditions are met or both parties agree.

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