[GeneralQuestions] Explain how multisig prevents the market from touching funds

I understand what multisig is (2 signatures out of 3 required to release funds, market holds one), but I don't exactly comprehend how the market can't touch the funds. If it goes out of your local wallet to the market wallet, in which you enter multisig mode with the vendor, how can't the market take the coins when it's in your market wallet? Or would you pay directly out of your local wallet to the multisig mode?

I understand there is /r/darknetmarketsnoobs but you guys seem more qualified to answer it. thanks


Comments


[3 Points] The_fire_bird:

You're very unlikely to ever see true multisig on these markets. Why? Because the markets can't guarantee to take their cut.

Think about it... If the buyer and the vendor decide they don't want to pay x% fees, what can the market do about it?

If I want to send a vendor 1.0 BTC with a fee of 5%, that's a total of 1.05 BTC.

Suppose I was nice enough to FE

Vendor got full amount, so they're happy, and I got my fees back, so I'm happy too. The market is of course pissed but the 2 of 3 system allowed it to happen.

3 of 3 doesn't guarantee it either either because I could still decide (after the vendor's been paid) that I don't want to pay my fees, the only difference is that I don't get them back, the bitcoins just sit there sticking their tongues out at everyone.

The markets will always want an override so that they can guarantee to get their cut, but as soon as you implement that override, it's no longer true multisig.


[2 Points] ThrowawayTehGay:

TheMarketplace used true multi-sig and it worked great. As far as I know, there were never any problems with the market not getting their cut. I'm pretty sure that when the wallet was created, the market's cut was only available to the market. The rest was available to the vendor. It's not like if you and the vendor decide to cut the market out that either of you would get their cut. The market's cut is coded into the multi-sig wallet, just like the vendor's cut is coded for them. Coded isnt' the right word, but i'm high and you all know what I mean.

Not sure if this is still relevant to your question, but here's how multi-sig worked on TMP.

  1. Place your order. As part of the ordering/buying process, you would provide your public key. A plugin from TMP made this easy to copy from Electrum.

  2. TMP would then create a multi-sig wallet and provide you with the address to deposit funds. When a few confirmations had been received in the wallet, the order was placed with the vendor.

  3. When you received your order, you would confirm and release just like any other market. This would provide your "signature" to the wallet. TMP would then provide their signature, take their cut, and the rest of the funds would be available to the vendor.

  4. If TMP had ever been raided/shutdown/whatever, the buyer and the vendor could manually sign the wallet with their public keys and the vendor would get the funds. Probably minus the market's intended fees since those would still be locked in the wallet.

  5. This protected buyers and vendors because the market couldn't take the money from the wallet without another signature. Sure, they could collude with a vendor to fuck a buyer over, but that's much harder to do on Evo-like scale. Also, a buyer and vendor couldn't fuck the market without the market knowing about it. And they wouldn't get the cut anyway, so there's no incentive.


[1 Points] Theeconomist1:

This was evo's implementation of multi sig and I agree it's useless for preventing exit scams. I'd assume a well implemented version of it would consist if a wallet not controlled by the market but where it only has one of the 3 necessary keys. I'm sure more experienced members can give a more thoughtful answer though.