Blockchain.info records first seen time, and short of that, they go into a block in a certain order, how ever the miner put it there.  That may not be absolutely correct in terms of time, but will work as a last resort for determining a winner.

Realistically I expect blockchain.info's first seen time will be good enough.

Limiting to first person only should work in the sense that pretty much anyone can check in the blockchain. There's some potential for trouble if transactions haven't propagated tho', but yeah, the "refund or execute" policy covers nicely.

You bring up some excellent points.

Not only could I offer a fluctuating rate as you point out, I could also include terms that make my offer contingent on a stable price.  If I make an offer based on a MtGox price, I could say that my offer is only valid if accepted while 24 hours of substantially reliable MtGox data is available and the MtGox high over the last 24 hours is no greater than 105% of the low over the same time period (and that otherwise, I issue a refund).  The glitches and gotchas are still present if MtGox is having issues of their own, but their impact is severely limited if an acceptance isn't allowed if it isn't clear that none of that is happening.

One of the things that doing orders like this would accomplish is to add major liquidity to the bitcoin-wide order book, especially if people are willing to put out fixed-price orders looking for dips and spikes in the price without having to leave money in exchanges to do so.  Fixed price orders wouldn't have so much need to depend on a stable price, and if escrow changed the trading landscape significantly, it would represent a good way for lots of non-technical people to get into Bitcoin using paper wallets "if the price drops a couple bucks" as I always seem to hear people say.

Basically you're slowly discovering/moving towards the OTC order book. http://bitcoin-otc.com/vieworderbook.php

So what stops someone from putting out such an offer and then not paying the cash?

It still comes down to the trust factor.

I am interested if you come up with an escrow function.

I do see this as something that would be good to have several Bitcoin escrow companies that compete and provide the trust needed.

Mike -- another excellent idea. I like where you are heading with this. Any way to encode in the block chain the the price and currency of the completed trade? This way reading the blockchain could also tell you the ticker price.

 You could imagine other forms of communication and time stamping using the blockchain (ie, sending binary messages in the Bitcoin amount...spy's could communicate this way, for example)

This is true, and I think it has its advantages.


This is true, it does resolve that part of administrative problems, but it creates a whole new set: someone needs to keep track of all the offers from all the parties, eventually this would have to somehow be built into a database, which rather than scouring the web for signed documents would more reasonably be pushed into by the very party offering. Which would make it a sort of OTC-OB.


Iirc you can only put lines in the orderbook if you're id'd with gribble, which means everything in there is actually signed.

Well, you could send a series of transactions to the address in binary code describing the proposed transaction...then 100% of your communicating could be done via the blockchain itself (and you wouldn't have to post on forums the details of the transactions).

Escrow could work like this: joe registers with Casascius escrow ltd and tells you his credit card info and a Bitcoin address. Bob registers with as well and tells you his Bitcoin address...when joe wants to make an offer to sell, he uses the Casascius offer encoder to send himself some Bitcoins as a string of 1's and 0's that fully describe the transaction (serving as proof of the terms).  Bob likes those terms and sends the coins.  The "Casascius insta-p2p distributed exchange block chain analyzer trade detector" notices that bob kept up his half of the bargain and issues a charge (according to the terms) to joes credit card.

I think this is your next business...why not?

Courts? It's an escrow service...you are the judge