How Smart Contracts and Stablecoins will Reshape Escrow

Escrow is a way to provide trust between a buyer and a seller in a transaction.

In an online transaction, how can a buyer be certain the seller will deliver the product or service? Likewise, how can a seller be sure that the buyer will pay? Escrow solves this problem with a neutral third-party to hold the asset and payment.

The escrow company will hold onto the money and the deed for the house.

The buyer gives the escrow agent a deposit and the seller gives the deed to the escrow agent.

As with any service, the escrow agent must be paid for their work.

Smart contracts execute without the need for a middleman, like an escrow agent.

With smart contracts, this escrow fee can be nearly eliminated.

Escrow is a costly process but smart contracts can change this.

As the usability of cryptocurrencies continues to expand there will be an increasing demand for smart contracts in escrow.

Stablecoins could be the final piece in solving the instability of existing smart contract escrow.