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1```
2  Layer: Applications
3  Title: 3-of-4 Multisignature Escrow
4  Author: Yuki Aoki <ayukiyhs at gmail.com>
5  Created: 2018-11-17
6```
7
8## Abstract
9
10This extends 2-of-3 multisignature escrow so that administrators can control funds in a more decentralized way.
11
12## Motivation
13
142-of-3 multisignature escrow is a safe and usable solution when buying something with cryptocurrency. But when it comes to using in practice, administrators of the platforms may want to collect a charge for use or apply additional rules.
15
16This method extends 2-of-3 multisig escrow. It provides not only users but also administrators to control their funds.
17By this, for example, administrators can make platform users pay fees without depriving users of their fund ownership. 
18Besides, administrators can enforce some rules.
19
20## Definitions
21
22* Seller - He opens on the escrow platform
23* Buyer - He wants to buy some goods from the seller
24* Platform Administrator - A person or organization running the escrow platform.
25* Platform server - An online computer which is run by platform administrator and manages users' order.
26
27Each has own private key.
28
29## Specification
30
311. Buyer clicks "Buy" button on the escrow platform.
322. Collect public key of buyer and seller.
333. Issue a 3-of-4 multisig P2SH(or P2WSH if SegWit) address, which is made up of public keys below.
34  - Buyer
35  - Seller
36  - Platform Server
37  - Platform Administrator
384. Buyer deposits money, including the price and the blockchain fee and platform usage fee, into the multisig address.
395. Seller recognizes the deposit so he can send buyer merchandise.
406. Buyer notifies the platform that he received merchandise.
417. Platform server creates and signs a transaction.
42  * Signed with platform server's private key
43  * Outputs are the seller's address, a platform fee pool.
448. Buyer and seller sign the transaction.
459. Broadcast the transaction.
46
47If the seller doesn't send merchandise, or buyer and seller have trouble signing the transaction: for instance, due to the lack of blockchain skills, platform administrator can intervene and rollback with platform administrator's private key.
48
49Even if the well-trained user were to modify transaction and try to deny paying the usage fee, it is no use trying it, because it has already been signed by platform server. By this mechanism, the platform forces users to pay a charge. That makes a difference between 2-of-3 multisig escrow.
50
51This method will fit when there are a wallet app and the app sign separately with Custom URL API.
52
53The disadvantage is that buyer and seller must trust administrator to an extent. If platform server go down, the transaction is not to be created. But platform administrator cannot access funds in multisignature address directly, so administrator have no incentive to stop service on purpose. So, I conclude that this method is far safer than fully-centralized escrow service like almost all of cryptocurrency exchanges.
54
55## Implementation
56
57In development
58
59## Changelogs
60
61* 2018-11-20 Moved to here.
62* 2018-11-17 Initial
63
64## Copyright
65
662018 Yuki Aoki all rights reserved