Zenland

Ever since the dawn of the “electronic peer-to-peer cash system” conceptualized by Satoshi Nakamoto, people have been bewildered by the technology behind cryptocurrency payments. In the absence of central authority, blockchain’s quick and anonymous manner of transactions attracts more people to it. As a result of crypto adoption and little security against skilled scammers and hacker attacks the need for a blockchain escrow emerges.Leveraging the power of smart contracts, blockchain escrow provides a secure and transparent way to facilitate cryptocurrency payments. Simply put, it is a digital agreement that temporarily holds funds or assets involved in a transaction between two parties. A core component of it, a smart contract, is used to automate and enforce the terms of the agreement, ensuring that the conditions are met before the funds or assets are released to the intended recipient.In this article, we’ll discuss the best practices for using blockchain escrow in crypto transactions to minimize risks and disputes while maximizing the potential benefits of this web3-focused emerging technology.Choosing a Blockchain Escrow Service ProviderIn light of the controversy surrounding cryptocurrency payments, it is essential to know how to choose any blockchain service provider. Besides the obvious ones like the service fees and supported networks, there are other key factors you want to consider.What to look for in a service provider<h2 id="header-0">Reputation and credibility</h2>This seems straightforward and yet is where the tricky part is. Unlike the web2 service providers, where anyone can simply check public reviews on popular review websites, most web3 services may not have their presence on such review platforms or have a rather limited number of reviews. This makes it harder to verify whether or not the platform can be trusted.That said, no one has canceled the good old “do your research”, right?Following and analyzing potential service providers on social media (including popular listing platforms like CoinMarketCap or Coingecko), major cryptocurrency forums (BitcoinTalk, for example), and content publishing platforms should help you decide.<h2 id="header-1">Security and transparency</h2>The less data is stored on the server, the less control the service provider has over your cryptocurrency payments. Ideally, the provider does not store any transactional data about the users, and the payments are locked inside non-custodial smart contracts run on open-source blockchains.Non-custodial smart contracts cannot be accessed by other users except the direct participants of the agreement. Any third-party involvement in such contracts is conditional and will not be allowed until specifically requested and approved by the direct participants. Regardless of the service provider, the smart contract code should not leave any backdoors for transaction manipulation. This can be verified by the audit reports and viewed directly from the code.In short, look for providers that either offer robust security measures to protect your data on their servers or do not store personal data at all.<h2 id="header-2">User experience</h2>The rule of thumb is to try the service before the actual cryptocurrency payment. Depending on the platform you may or may not have a free trial. Yet it is still worth spending a few dollars to see how easy and safe the payment process is. It is certainly easier to follow the steps with clear instructions and a responsive support team.Multiple blockchain networks and currencies supported by blockchain escrow improve the speed and effectiveness of the escrow transaction. Altogether, it leads to a smooth and positive user experience &#x1f642;Popular blockchain escrow servicesTechnically there are three types of escrow services for today’s cryptocurrency users:<ul><li>Blockchain-based escrow platforms;</li><li>Centralized P2P payment solutions integrating crypto(PayPal, Zelle, etc);</li><li>Trusted individuals offering to be a human escrow.</li></ul>For the sake of this article, we should be covering only the first option of decentralized applications (dApps) providing escrow services. Below are the top 3 platforms to try for your next cryptocurrency payment.<h2 id="header-3">Zenland</h2>Zenland is a user-friendly crypto escrow platform with a focus on security and transparency. Provides simple escrow templates for both one-time value exchange and multiple payment transactions with different clients. The second option has a web3 store functionality with a smart contract payment gateway for online sellers and service providers. The platform supports major networks such as Ethereum, BNB Smart Chain, Polygon, Gnosis, etc.<h2 id="header-4">Smartlink</h2>Smartlink is an escrow platform that supports multiple cryptocurrencies and allows users to create custom contracts. Provides a wide range of payment services for all kinds of businesses through smart contracts on the Tezos blockchain. Some operations may require deposits of the native currency SMAK to access the escrow system.<h2 id="header-5">Cryptegrity</h2>Cryptegrity offers a range of escrow services, including multi-signature wallets and dispute resolution options. According to the official website, some services are yet to be released.Setting Up an Escrow Transaction as 1, 2, 3Now as you already know what to look for when choosing a blockchain escrow and what service providers exist, it’s time to see how cryptocurrency payments are made with the escrow platform.Unlike traditional escrow services like Escrow.com, a blockchain escrow service should not require sensitive information such as your billing address or phone number. Depending on the platform you choose, the process has around 4–5 steps — from the initiation of the escrow transaction to its completion.As with any escrow service, the two parties first agree on the terms of the value exchange as to what, when, and how it will be carried out.<h2 id="header-6">Step 1: Sign in to your account to initiate the escrow agreement</h2><img src="https://miro.medium.com/v2/resize:fit:700/1*29visuBIg1Ngwp7yanrZlA.png" />Use a non-custodial web3 wallet to log inOn Zenland, users connect their Metamask wallets, and the address serves as a unique identifier for user contracts, chat messaging, or a hosted web3 shop. If preferred, a custom name, including .eth, .bnb, or .arb, etc., can be chosen instead. Regular registration details like email or password are not required.<h2 id="header-7">Step 2: Fill out an escrow agreement form</h2><img src="https://miro.medium.com/v2/resize:fit:700/1*9ljNQ5t4AOo8QsIgJVIe-Q.png" />Fill out a simple form to initiate an escrow transaction with the other partyEither one of the two users, the sender or the recipient, can fill out a simple escrow form to initiate the transaction agreement. It briefly describes what product, service, or asset is being exchanged between the two users, the two wallet addresses that send and receive payments, and the amount that is being paid. The contract also states what the service fee is and whether or not it’s fully paid by either side or split between the two.To prevent unfair claims and misunderstandings between the two parties, the initiated agreement is approved or edited by both sides before the next step.<h2 id="header-8">Step 3: Send the contract to the blockchain and deposit the payment</h2><img src="https://miro.medium.com/v2/resize:fit:700/1*58flOCGAXq-yrke__xeRfA.png" />An approved contract is sent to the blockchain and receives its permanent address thereAs soon as the parties approve the deal, the contract is deployed (published) to the blockchain. Sending it to the blockchain is similar to entering a document into the registry or adding a new book to the library catalog. The document or the book receives the address where it is stored.Then, the payment that both users agreed to is temporarily deposited to that address. The conditions of when and where it will be released are saved in the contract code. Because the code is the law, neither party can influence the release until the agreed terms are completed.Managing an Escrow TransactionNow as the contract keeps the payment, the recipient can deliver the value and get paid. Since every transaction is verified on-chain, both users are managing the escrow transaction through a user-friendly interface.Specific lookup websites, known as blockchain explorers, are used to verify every step of the escrow agreement. This is done by entering the contract address into the search bar. The very address a smart contract receives once published to the blockchain.Monitoring the transaction progressUnlike the traditional centralized escrow systems where a third party must confirm that the payment has been deposited, a blockchain escrow has a clear advantage. Because of the escrow process happening on the blockchain, any transaction has its timestamped record in a particular block of the blockchain.This transaction transparency prevents any party from cheating. Once the smart contract is sent to the blockchain, the seller can see if the payment has been deposited before starting to work on the order.Both parties can view their transaction statuses without leaving the Zenland platform. All confirmed transactions are seen in the chat associated with the particular contract and also serve as a private chat between the two parties.Releasing funds and escrow mechanismsAll said, escrow transactions are secure on both ends and play a major role in reducing the number of disputes and misunderstandings common in the cryptocurrency world. This is done by leveraging smart contract logic and blockchain transparency and decentralization.So, what are these smart blockchain escrow mechanisms that save each party (the sender and the recipient) from scam payments or fraudulent chargebacks?<ul><li>The sender safely locks payment inside a smart contract rather than sending it to a third party or directly to the recipient.</li><li>The recipient, usually the product or service provider, can see if and when the payment has been deposited by the sender (a.k.a. a buyer or a client).</li><li>The sender cannot return back the payment or dispute until the agreed date for the order has passed.</li><li>The recipient cannot claim the payment until the order has been received and the sender released the payment.</li><li>The sender can dispute and refuse to release payment until the order satisfies the agreed quality or quantity terms saved in the contract code.</li><li>The recipient can dispute and claim payment if the order has been completed as agreed but the sender refuses to pay.</li></ul>If neither party is able to resolve the conflict on their own, they are able to invite a neutral third party (Agent, resolver) to review their case. Each side provides evidence to support their claims and the resolver verifies the transactions in the blockchain records. Then, the resolver gets to decide whether to release payment to the recipient, or fully or partially return to the sender.Disputes are handled on a case-by-case basis and can only be initiated by the direct participants. A special condition in the smart contract code prevents any external influence of a third party unless invited.The Bottom LineUndoubtedly, given its transparency and conditional terms, blockchain escrow can potentially revolutionize cryptocurrency payments. As the P2P cryptocurrency payments evolve the need for a secure and web3-based solution brings non-custodial smart contracts to use.Yet, choosing the right escrow service provider can be tricky with key factors like speed, security, and ease of use contributing to successful P2P crypto transactions.As a pioneer of smart-contract-as-a service (SCaaS), Zenland is leading smart contract adoption in all areas of our daily lives. P2P cryptocurrency payment is one such area where the introduction of blockchain escrow can improve the security and efficiency of any exchange of value and bring peace of mind to all cryptocurrency users.At the moment, Zenland supports major EVM networks and is on a mission to build a trustless security layer for anyone trading products, services, or assets directly with another user online. This is achieved by leveraging the power of both smart contracts and open-source blockchain technology to build a secure and scalable platform for web3 commerce.Learn more about Zenland from the <a href="https://zen.land/static/pdf/whitepaper.pdf" rel="noopener noreferrer nofollow">Zenland Whitepaper</a>.

Blockchain Escrow and Crypto Transactions: Best Practices

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