Understanding Real Escrow
These days everyone, even those who don’t understand the concept of cryptocurrency and blockchain, has heard something about crypto. Especially about buying and selling of cryptocurrency. Why? Firstly because of the Bitcoin boom and then plenty of scammers have been around making a lot of negative publicity for those who are interested to invest in cryptocurrencies.
Historically we have been relying on banks or other licensed financial organizations to protect us from scammers. These days when cryptocurrency and financial operations are decentralized, that is without licenses, regulators, and regulations, the problems of trust and safety become the primary concern. That is the reason so many new projects have started their escrow services.
What is escrow service?
Simply – there is a third party between seller and buyer who protects and controls financial assets. Service provider assures both sides that the deal is legit, safe and both sides can trust to proceed. Even more – money is in a safe “place” between parties and can be only released when both sides are satisfied with the deal. If you have used Upwork or other similar online service mediators – they are also a kind of escrow service where a person who works can be sure that he/she will get paid after work is done, also those who order work – in case of disagreement, can get their money back.
Some of the cheating schemes in a crypto world
How to feel safe and protect yourself from those who are ready to cheat you? Let us see some situation where you can be scammed.
Let’s imagine you have some cryptocurrency, maybe Bitcoin or Ethereum. A plan is to sell it, and you choose let’s say LocalBitcoin service. Why not Coinbase? That is another platform for selling and buying the most used and popular cryptocurrencies. Coinbase has their strict rules, for example, you as a person have to be verified and it can take a long time, or you have to connect your bank account or credit card to your account what means that all your transactions will be visible by the bank and tax department. If you live in a country that restricts trading of cryptocurrencies – this option will not be yours. In such cases, LocalBitcoin might work better. But here is a problem.
Someone is ready to buy Bitcoin from you and pay through PayPal. Great! The rate is extremely good, a buyer has few reviews, his account is let’s say 1 year old. Seems good, isn’t? You sell him your Bitcoin, he sends you agreed amount of EUR or USD through PayPal. Seeing money in PayPal you release your Bitcoin that is held with the LocalBitcoin internal escrow service.
And then comes surprise – in 1 or 2 days you see in your PayPal transaction is reversed. If you start to argue with PayPal – they will, first of all, remind you that this payment system doesn’t support any transactions with cryptocurrencies. Second – if you can’t provide any invoice against the amount that you received from someone and the amount suddenly became negative – you have lost this money almost 100% because someone else has already claimed (or scammer himself) it as an unauthorized transaction from their credit cards and PayPal has 30 days protection period. This is one of the scams that is used in LocalBitcoin and you are not protected.
Must also add that LocalBitcoin’s escrow system works well, it’s just that the financial operations are complicated and not all transactions are safe.
Blockchain and escrow
There are many new projects that offer escrow services through blockchain. Will name just a few. IBC Escrow Services – blockchain smart contract but traditional company; project Feelium that offers their smart contract together with a wallets and exchange platform; Escrow my Bits that offers four different types of escrow services, all through smart contracts; PayFair that has their own peer-to-peer exchange where you can use their escrow service or sell/buy without it; and many others like DIW, Guardian Coin, Cryptassist, Serenity and more.
One of the projects that recently got my attention is Xchange. First of all, this project has an international team where the main founder is Joseph Cohen who is leading it. Joseph has been a cybersecurity consultant at Leet Cyber Security company for several years and this gives him deep insights into possible scenarios of scams. It shows certain confidence that team knows what are they doing. Secondly, there is a strong team and they show their names, LinkedIn profile, and information on who are they and what is their job experience. This builds trust in the concrete project.
What exactly is the project Xchange?
Basically, it is a peer-to-peer escrow service that preserves the privacy and freedom of those who want to trade one type of currency for another. Xchange in-wallet escrow feature removes the human element and makes it possible for users to trade with no third party risk. Recently the team has officially filed an application with the USPTO (USA patent and trademark office) and now they have a patent pending for their new technology.
Project ticker is XCG, that I will use further.
How the project was created
The idea appeared when some of the team members fell victims of a cryptocurrency scam Digifel – a masternode project that was the scam. Then they decided to build a risk-free and safe crypto trading P2P platform. Their focus is “to give a new power of trading back to the people as a real bartering system and not a factious hype influenced movement.” This draws another angle in a philosophy of the project – trading P2P instead of hype. There is a certain roadmap that shows the team’s experience and confidence in what they are doing.
Specifications of the project
Xchange solves this by allowing P2P trades, in-wallet, with any combination of coins (except for those that have been blacklisted as scams). The process is automated, anonymous, and secure. Coins that users can trade on this platform are added by the user base using the #request-a-coin channel in Discord. The platform is adding regularly new coins and here is the list of coins available for trade right now.
List of currently supported coins:
AEG, BTC, BTCZ, BWK, DEV, DOGE, LPC, LTC, NOS, REDN, RVN, XCG, XXX
But this is just the start of this project. Longer-term plans include a partnership with companies for selling goods against cryptocurrencies, as well as issue of physical XCG payment card that could be used also in ATMs.
In such a project, Masternode is used as a generator for cash flow and income to grow with the project. Masternode collateral is 50 000 XCG that means today, August 27, 2018, you can buy it for average $2700 with block reward 4/6 XCG and ROI currently are set at 1000% per year but this will be going to 500% per year in the near future as a number of masternodes increase.
The big step forward was taken on August 4, 2018, when the team announced their first partnership with Mayfield Technology Group Inc. Canada, in their Twitter and Discord account. XCGtech coin will be accepted as a payment option for services given by Mayfield Technology Group.
See Discord screenshot below
XCG on a trading platforms
XCG recently has been included for trading in the few exchanges like BTC-Alpha and CoinExchange.
Market value fluctuation between $0.04 an all-time high $0.259185 (see more details on LiveCoinWatch website). On August 27, 2018, there are 768 617 coins in circulation. Total supply of the coin will be 100 million where 3 million is premined.
Patent pending
The most of blockchain companies exercising existing algorithms and technically modifying chain. What is interesting about Xchange – they have worked on something unique and applied even for the patent in USPTO (the United States Patent and Trademark Office) for their the in-wallet escrow system and the in-wallet auction system that they have created.
Here I need to dive a little into what exactly is in-wallet auction system. I would put it in simple words – the platform for those who want to buy or sell coins with a set time-frame and minimum sales price while choosing the types of coins they want to receive as payment. Project’s goal is to provide a means of trading coins without compromising the user’s security like storing coins on a centralized exchange wallet. At the current stage, the auction will only support an exchange of coins. But further idea is to adapt it for other goods and services in the future. On August 24, 2018, was finished acceptance of applications for Beta testing so in near future we can wait for new product to come.
Giving back to the society
The project has also stated that they are going to give back to those who need help. Their targets are concrete coders and sick kids 50/50 from masternode for the 3 months. This is currently one masternode that is set up for charity. It doesn’t bring rewards as well as any 45% CEO pay. A later project will choose different charitable organizations. There is another possibility to help – people can donate to charity through the project. They will be rewarded with XCG and pass the tax deductions back to them as well. This is an excellent initiative that shows how to work, think, and share your wealth.
Learn more about Xchange here.
