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Comment by smt88 | Hacker News Reader

This isn’t any difference than traditional escrow SaaS companies. They’re fully automated unless you have a dispute.

In your stated case, “smart contract” means software. It can’t verify that both sides of the transaction have met their obligations unless both obligations are on-chain, in which case there’s no added value.

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It is a little bit different, if you are doing it in centralised way - you have to control and secure everything - from databases to access to admin panels. It is quite complicated, requires robust processes, etc. Most of the finances are not really programmable, everything is done via simple scripts on some machine that just turns the knobs. You have to secure this part also.

It is a lot of work.

While for crypto-escrow you can just do a simple multi-sig with a hot keys that running on admin machines and they sign results there and they couldn't get the money, so no reason to try to hack the system.

Much easier setup.

But with these darknet markets everything's hidden and anonymous, so there used to be (?) something called an "exit scam" where they'd just disappear with whatever funds were currently waiting for a decision. If things are set up so that the cryptocoins can only go to one of two places (seller's or buyer's wallet) that can't happen.

That situation that it's avoiding is less of a concern with legitimate things where everyone knows who everyone is and law enforcement actually exists.

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