Selling all types of items online has become a commonplace act these days. Internet users use sites such as LeBonCoin or Ebay to classify their items for sale.
Selling online has many advantages as you know. Indeed, all you need to do is take a photo to be able to reach a wide range of potentially interested customers. Ok, so far we're all in agreement.
But, it must be admitted that there are also a lot of scammers... They too post photos but the only problem is that they are fake photos with a product that does not exist or is not equivalent to the photo.
In short, you have – I think – heard enough about online scams on Le BonCoin for example for me to do a big overview here.
What interests me here is rather showing you how cryptocurrency and especially blockchain can greatly help online purchases and sales.
For this, we will talk about "escrow" sites which are third-party trust services. To summarize the concept, these are sites where you can deposit money that can only be released if the sale or purchase has been completed.
The big scams in online sales
People who get scammed are usually attracted by the low prices initially. First, fraudsters find photos of used cars, for example, in good condition. Who wouldn't be tempted by a good, almost new car with 30% off? Usually, victims contact these fake sellers and here is where it all starts.
The goal of a rogue seller is to make it seem like everything is fine. Also, he will heavily emphasize the price which is low. He will also make up a lie to justify the low price. He can say, for example, that he is in a hurry to sell because he needs money or that he is moving, etc. But in most cases, any mythos is enough to seal a deal. Most often, very quickly, the seller puts pressure on and claims that there are other interested buyers, so the victim is pressed for time.
If all these red flags don't scare off the potential buyer yet, then the seller will move on to the next level: actually persuade them to send money. The scammer offers to use a third-party payment site, claiming that he has used it several times before. In reality, it is a site created by the scammer himself for one purpose: to become bait for a careless buyer. The victim registers on the suggested fake deposit site, sends the money via Western Union or MoneyGram (there is no way to cancel or refund a Western Union transaction), and the scammer disappears with their fake site and buyer's money.
A single ad can be used multiple times, scamming multiple people at once. Is there any way to protect yourself from this kind of situation?
Whether you are a seller or a buyer, here is a system that will certainly interest you.
Smart contracts: a viable alternative to third-party payment services
This situation described above can be easily avoided by using a reliable decentralized service. Instead of trusting your money to a third party, you can store it in a blockchain smart contract.
This means that no one will be able to touch your funds until you receive the item you paid for.
There are many decentralized payment services: Escaroo, Setescrow, Lockscrow.
These are the best known sites at the moment and that is why I cite them here.
All of them are based on the same principle: you can use crypto to pay for something and keep it somewhere safe where you and the other party can't release the money until the transaction is completed.
Escaroo is one of the most reliable services: it is the only decentralized peer-to-peer service that does not require the participation of a third party in this process at any time. When the transaction is created, the funds are locked in a smart contract and remain there until the buyer releases them.
Many existing crypto POS solutions have a key flaw: they store customer funds in a common pool, making them an attractive target for hackers.
Escaroo solves this problem by creating a unique smart contract for each transaction. Each transaction has a unique transaction address, making it impenetrable to hackers.
It is important to understand that the platform is not involved in transactions. The only thing the site does is automatically create smart contracts for customers.
When a transaction occurs, it happens between the two parties only. There are only a few solutions offering such security on the market. Moreover, on June 21, 2019, the startup filed a patent application for its payment service with the US Patent Office in order to register its unique solution.
Escaroo can be used for any type of transaction: both between individuals and in commercial transactions.
Personal matters involve the purchase of various items or something more expensive or unusual, like a car or even real estate.
The transaction value can vary from $10 to millions of dollars. It doesn't matter, because the decentralized escrow solution offers the same high security for any transaction, regardless of the amount of money involved.
Once the buyer has received the goods and is satisfied with the order, the funds can be released through the smart contract. Likewise, sellers can be confident that once they ship their goods, their money is there.
Everyone is happy at once thanks to this clearly ingenious and practical system.
Blockchain to the rescue of online sales between individuals
The invention of decentralized digital currency solves so many problems related to financial transactions between multiple parties that it may one day be considered one of the most important technologies of the century. This is what I believe and very clearly, all crypto-holders also believe it to a greater or lesser extent.
We see with the development of these solutions that blockchain is taking on a new dimension. We're thinking a little more off the beaten track and we can clearly see the implication of blockchain in our ways of buying and selling online.
I really wanted to talk to you about these solutions for this, in fact. To be able to show concrete applications of the blockchain.
Not everyone has good intentions. Some people desperately want to make a living stealing from other people, and by doing it online they can remain anonymous in most cases. With this kind of third-party payment system, we have a good solution to counter scams.
If I mention these sites in this article, it is purely for informational purposes. None of the material should be construed as investment advice or financial advice.
