"An escrow is a contractual arrangement in which a third party receives and disburses money or documents for the primary transacting parties, with the disbursement dependent on conditions, agreed to by the transacting parties, or an account established by a broker for holding funds on behalf of the broker's principal or some other person until the consummation or termination of a transaction....The word derives from the Old French word escroue, meaning a scrap of paper or a scroll of parchment; this indicated the deed that a third party held until a transaction was completed."
So what does this mean for LocalCoinSwap? Transacting cryptocurrency over the internet directly with an unknown counterparty generally carries a lot of risks. What if you send them some fiat currency and they never send you any cryptocurrency in return? What if you try to sell some crypto but never receive the payment? This is where LocalCoinSwap helps.
When 2 users enter into an agreement to trade cryptocurrency on LocalCoinSwap, the cryptocurrency portion of the trade is held in escrow by LocalCoinSwap. Only once both parties agree that the payment has been made will cryptocurrency be released from escrow to the buyer. If there is a dispute on the payment, then a LocalCoinSwap dispute resolution manager will analyse the trade and gather evidence from each party to determine who should receive the cryptocurrency. This escrow process drastically reduces the risks involved in trading with unknown parties.