escrowexample.txt

2-of-2 escrow example

Carbide81 wants to pay carbide80 50tnbtc but prevent carebide80 from cheating him.

First each party creates a new address, and then shares them. Then uses the 
resulting addresses to make a p2sh address (begins with '3' for bitcoin,
'2' for testnet) that requires both parties to sign to release:

The distributed redemption here (where no party has all the required keys
requires bitcoin 0.7 or later)

Instead the parties could do a 2-of-3 which would allow a mediator to
settle a dispute, that works exactly the same but instead of two public keys
three would be provided.

On carbide81:
[testnet01@carbide81 ~]$ ~/bitcoin/src/bitcoind getnewaddress
mpzXCDpitVhGe1WofQXjzC1zgxGA5GCfgD

Validateaddress is used to get the pubkey for the address,
which is what we need to create the p2sh address.

[testnet01@carbide81 ~]$ ~/bitcoin/src/bitcoind validateaddress mpzXCDpitVhGe1WofQXjzC1zgxGA5GCfgD
{
    "isvalid" : true,
    "address" : "mpzXCDpitVhGe1WofQXjzC1zgxGA5GCfgD",
    "ismine" : true,
    "isscript" : false,
    "pubkey" :
    "0287f9169e265380a87cfd717ec543683f572db8b5a6d06231ff59c43429063ae4",
    "iscompressed" : true,
    "account" : ""
}
[testnet01@carbide81 ~]$ ~/bitcoin/src/bitcoind addmultisigaddress 2 '["0287f9169e265380a87cfd717ec543683f572db8b5a6d06231ff59c43429063ae4","0343947d178f20b8267488e488442650c27e1e9956c824077f646d6ce13a285d84"]'
2MxKEf2su6FGAUfCEAHreGFQvEYrfYNHvL7

On carbide80:

[testnet01@carbide80 ~]$ ~/bitcoin/src/bitcoind getnewaddress
mirQLRn6ciqa3WwJSSe7RSJNVfAE9zLkS5
[testnet01@carbide80 ~]$ ~/bitcoin/src/bitcoind validateaddress mirQLRn6ciqa3WwJSSe7RSJNVfAE9zLkS5
{
    "isvalid" : true,
    "address" : "mirQLRn6ciqa3WwJSSe7RSJNVfAE9zLkS5",
    "ismine" : true,
    "isscript" : false,
    "pubkey" :
    "0343947d178f20b8267488e488442650c27e1e9956c824077f646d6ce13a285d84",
    "iscompressed" : true,
    "account" : ""
}
[testnet01@carbide80 ~]$ ~/bitcoin/src/bitcoind addmultisigaddress 2 '["0287f9169e265380a87cfd717ec543683f572db8b5a6d06231ff59c43429063ae4","0343947d178f20b8267488e488442650c27e1e9956c824077f646d6ce13a285d84"]'
2MxKEf2su6FGAUfCEAHreGFQvEYrfYNHvL7

Now carbide81 pays the p2sh address.

On carbide81:

[testnet01@carbide81 ~]$ ~/bitcoin/src/bitcoind sendtoaddress 2MxKEf2su6FGAUfCEAHreGFQvEYrfYNHvL7 50.0
7649b33b6d80f7b5c866fbdb413419e04223974b0a5d6a3ca54944f30474d2bf


On carbide80:

Carbide80 can see the p2sh paying transaction:

[testnet01@carbide80 ~]$ ~/bitcoin/src/bitcoind getrawtransaction 7649b33b6d80f7b5c866fbdb413419e04223974b0a5d6a3ca54944f30474d2bf 1
{
    "hex" : "01000000013c0c37049cefb7d0754c716c1227e221f1b5cc9fdf7fc8e6aadd5ce6465fad32000000004a493046022100b41330548f320fcc282d72462656f80c0da64beb352f7fbbdf55d651674b5846022100cbef624c80302900e6c0e9b4bbb024cd072e54d7535c8a79a3ce9b36c304d7cc01ffffffff0100f2052a0100000017a914379ad9b7ba73bdc1e29e286e014d4e2e1f6884e38700000000",
    "txid" : "7649b33b6d80f7b5c866fbdb413419e04223974b0a5d6a3ca54944f30474d2bf",
    "version" : 1,
    "locktime" : 0,
    "vin" : [
        {
            "txid" : "32ad5f46e65cddaae6c87fdf9fccb5f121e227126c714c75d0b7ef9c04370c3c",
            "vout" : 0,
            "scriptSig" : {
                "asm" : "3046022100b41330548f320fcc282d72462656f80c0da64beb352f7fbbdf55d651674b5846022100cbef624c80302900e6c0e9b4bbb024cd072e54d7535c8a79a3ce9b36c304d7cc01",
                "hex" : "493046022100b41330548f320fcc282d72462656f80c0da64beb352f7fbbdf55d651674b5846022100cbef624c80302900e6c0e9b4bbb024cd072e54d7535c8a79a3ce9b36c304d7cc01"
            },
            "sequence" : 4294967295
        }
    ],
    "vout" : [
        {
            "value" : 50.00000000,
            "n" : 0,
            "scriptPubKey" : {
                "asm" : "OP_HASH160 379ad9b7ba73bdc1e29e286e014d4e2e1f6884e3 OP_EQUAL",
                "hex" : "a914379ad9b7ba73bdc1e29e286e014d4e2e1f6884e387",
                "reqSigs" : 1,
                "type" : "scripthash",
                "addresses" : [
                    "2MxKEf2su6FGAUfCEAHreGFQvEYrfYNHvL7"
                ]
            }
        }
    ]
}

Normally 80 wait until the payment into the escrow has several confirmations, then he'd release the goods.

Now we assume the deal is complete to everyone's satisfaction and carbide80 wants to take the coins out of escrow:

He drafts a transaction paying the escrow entirely into some regular address of his.
(We reuse the earlier one, but thats not required... the escrow could pay anywhere, even
another escrow).

[testnet01@carbide80 ~]$ ~/bitcoin/src/bitcoind createrawtransaction '[{"txid":"7649b33b6d80f7b5c866fbdb413419e04223974b0a5d6a3ca54944f30474d2bf","vout":0}]' '{"mirQLRn6ciqa3WwJSSe7RSJNVfAE9zLkS5":50}'
0100000001bfd27404f34449a53c6a5d0a4b972342e0193441dbfb66c8b5f7806d3bb349760000000000ffffffff0100f2052a010000001976a914249604bc668da89a7d2d494b89fba47f529c52f788ac00000000

He signs it, but it's not complete yet... it still needs 81's signature.

[testnet01@carbide80 ~]$ ~/bitcoin/src/bitcoind signrawtransaction 0100000001bfd27404f34449a53c6a5d0a4b972342e0193441dbfb66c8b5f7806d3bb349760000000000ffffffff0100f2052a010000001976a914249604bc668da89a7d2d494b89fba47f529c52f788ac00000000
{
    "hex" : "0100000001bfd27404f34449a53c6a5d0a4b972342e0193441dbfb66c8b5f7806d3bb3497600000000920048304502210084470f4972aab95892e6871168fa0d8456a7e4f55cfc8786a5ffef289d9d312602206d048d4fa39fd987235ad025c0e2d30ff4d6e7ab60ed5fb899952a3ef888cbf4014752210287f9169e265380a87cfd717ec543683f572db8b5a6d06231ff59c43429063ae4210343947d178f20b8267488e488442650c27e1e9956c824077f646d6ce13a285d8452aeffffffff0100f2052a010000001976a914249604bc668da89a7d2d494b89fba47f529c52f788ac00000000",
    "complete" : false
}

81 is happy, so he signs:

[testnet01@carbide81 ~]$ ~/bitcoin/src/bitcoind signrawtransaction 0100000001bfd27404f34449a53c6a5d0a4b972342e0193441dbfb66c8b5f7806d3bb3497600000000920048304502210084470f4972aab95892e6871168fa0d8456a7e4f55cfc8786a5ffef289d9d312602206d048d4fa39fd987235ad025c0e2d30ff4d6e7ab60ed5fb899952a3ef888cbf4014752210287f9169e265380a87cfd717ec543683f572db8b5a6d06231ff59c43429063ae4210343947d178f20b8267488e488442650c27e1e9956c824077f646d6ce13a285d8452aeffffffff0100f2052a010000001976a914249604bc668da89a7d2d494b89fba47f529c52f788ac00000000
{
    "hex" : "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",
    "complete" : true
}

Then either of them announce the transaction to the network:

[testnet01@carbide81 ~]$ ~/bitcoin/src/bitcoind sendrawtransaction 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
35cdf0594ef0890703a8ede92f6fc80272d0b0b73d19d2a9af80dd17c11e188c

And 80 now sees his unencumbered funds:

[testnet01@carbide80 ~]$ ~/bitcoin/src/bitcoind listtransactions "" 1
[
    {
        "account" : "",
        "address" : "mirQLRn6ciqa3WwJSSe7RSJNVfAE9zLkS5",
        "category" : "receive",
        "amount" : 50.00000000,
        "confirmations" : 0,
        "txid" : "35cdf0594ef0890703a8ede92f6fc80272d0b0b73d19d2a9af80dd17c11e188c",
        "time" : 1344968358
    }
]