Using third-party services for bitcoin transactions is a great idea, especially for LocalBitcoins users. This is because these types of transactions take place between two untrusted parties. So, you never know when a seemingly simple transaction could turn into an ordeal.
To avoid any unfortunate incident, we advise you to transact bitcoins via escrow service. The escrow service protects users from scams and makes sure that the transactions are taking place in a safer environment.
Learn about the most common Bitcoin scams and how to avoid them.
In case there is a dispute, the escrow service would act as an arbitrator and determine who the funds actually belong to.
Many Bitcoin marketplaces (BitPremier, CryptoThrift, Local Bitcoins, etc.) come with a built-in escrow service. However, if the marketplace through which you are making a transaction doesn’t provide one, then consider the ones discussed below.
Best Bitcoin Escrow Services:
Here are some of the best Bitcoin escrow services to trade your coins.
BTCrow was established in 2011 and is one of the oldest escrow services out there. Although, the only long-lived solution, BTCrow isn’t that reliable. There have been many complaints regarding delayed payments and system’s response. For example, a user once made a transaction through this service but didn’t receive the payment for a good while. Even after contacting BTCrow support, it took around 12 hours to release the payment which was $7,500 USD. This is way too much for a transaction involving this much money.
Escrow My Bits:
Established just two years ago, “Escrow My Bits” has gone on to become one of the go-to names for Bitcoin users. The site offers a wide variety of services to escrow bitcoin, including:
The site provides the user with a Bitcoin wallet address and asks them to deposit funds in the account. These funds are then forwarded to offline wallets (cold storage) which is one of the most advanced forms of wallet security.
Regular Escrow Pegged to Traditional Value:
The coins are deposited into an account controlled by the site. After the deposit, the coins are pegged to conventional value.
This service secures your funds through a multi-signature transaction. The funds cannot be withdrawn unless all the signatures are accurately provided. The site holds only one of your private keys.
Multi-Signature Escrow Pegged to A Fiat Value:
Similar to the one mentioned earlier, your funds are kept in a secure multi-signature transaction using “Nubits” or “Omni” to peg the value.
The primary advantage of Escrow My Bits is that if a transaction takes longer than expected, you can still peg it to the fiat currency without the exchange rates affecting you.
The site deducts 1% per transaction in service charges.
A Bitcoin escrow service which comes with the multi-signature feature. Bitrate is more like a multi-signature wallet.
A multi-signature bitcoin wallet is a wallet which can have multiple owners. To complete a transaction, these wallets require the signatures of involved parties. For example, if a wallet is shared by three individuals and two of those three decide to make a transaction, the order is executed.
The biggest advantage of Bitrate is that the site itself doesn’t hold the private key so it cannot steal your funds.