The Escaroo Story
How the founder of Escaroo lost $20,000 ordering services with cryptocurrency, and what he did to try and stop this from happening to others.
Last year the founder of Escaroo was helping a client promote their new blockchain-based startup. In doing so he needed to hire on various service providers, including several articles and press release writers, social network promoters and social influencers. Some of these service providers wanted to be paid in cryptocurrency, which made sense considering the space we were working in.
After sending the cryptocurrency in the amounts agreed, a number of these service providers backed out of their offers. He could not believe it! In the space of a week, 3 different people refused to deliver as promised, even after receiving payment, accounting for more than $20,000 in lost funds. He was furious, how could this be? Crypto was supposed to fix all the ills associated with fiat currency, but the truth set in, people are people, and even the greatest of tech advances cannot cure some things... or can it?
He started searching the Internet and found several escrow service providers that all looked promising. After reading through their websites, He realized they were all basically the same. As he started digging into how these companies were providing their services, he quickly realized that they were all taking the well-established model of escrow and applying it to their crypto business, but this is problematic.
In traditional escrow, the monies are held in a single bank account and are managed by a single fund manager or team of fund managers. These fund managers account for every transaction in and out, knowing exactly where every penny is at all times. This process works great when applied to fiat currencies, but when attempting to do this with cryptocurrency an enormous problem appears. The problem is so big that he decided to start Escaroo to try and fix it.