In the business world, escrow is essential. A third-party is necessary to ensure that both parties on either end of the transaction hold up their end of the bargain. In an ever-evolving world, the way we handle business transactions has seen many changes. While blockchain has garnered media attention as a burgeoning form of tender, it’s not the future of escrow. Traditional methods are proven effective and will stand the test of time against cryptocurrency. Here’s why.
Cryptocurrency is Not Proven
Right now, blockchain is like the wild west. Information is out in the open, yet out in the ether. Being such a new concept, we haven’t seen what the lasting effects of cryptocurrency are.
What seems like such a secure concept could be the most compromising. That’s why cryptocurrency will not be the norm in the foreseeable future. No one is sure of the long-term ramifications.
Blockchain is Not as Transparent
Many cryptocurrency companies are tinkering with the concept of an escrow. However, it’s hard for the average person to gauge a value they would understand in terms of their actual assets. You’d need an expert in cryptocurrency and math to make a calculated decision.
Whereas, traditional practices is a universal language at this point. You can speak to an actual human and get answers to your concerns. Plus, humans see traditional money as tangible. It’s not data floating in a server somewhere in the blockchain.
Cryptocurrency Doesn’t Fit with Other Processes
Escrow isn’t a business that thrives on its own. It relies on insurance companies, mortgage companies, and other creditors. These are all cogs in the machines that make the business world go round.
If someone pays a real estate agent for a home with bitcoin, that doesn’t mean the buyer can insure the house or set up an escrow account with cryptocurrency. Using an entirely different form of tender than you’d use to settle all the other essentials would complicate the process for the buyer. Who needs that headache? This why cryptocurrency isn’t feasible as the future of escrow.