Understanding the Differences Between Multisig vs. Escrow vs. Finalize Early on Darknet Markets

Payment alternatives now available on several dark web marketplaces include escrow, multisig, and finalize early. It goes without saying that you should have already learned how to use darknet markets before needing to choose the method by which you will pay sellers.

To summarize the entire process, you will need to obtain some cryptocurrency to spend as soon as you have successfully configured your computer to access Tor hidden services. Because you will most likely be purchasing illegal things, credit cards and PayPal will not be acceptable payment methods because law enforcement and third parties will be able to readily trace the transactions back to you.

As a result, the currency of choice is typically Bitcoin or one of the alternative coins. Their application will be determined by the needs of a specific dark web market as well as vendor preference.

Although Bitcoin allows users to create a wallet without revealing their identify, it is not as completely anonymous as many people believe. This is because all payments made by users are typically stored on a public blockchain that anybody can observe.

The ideal solution to this problem is to use a Bitcoin mixing service when transferring digital cash to your preferred marketplace shopping wallet. This technique will make determining the origin of the bitcoin extremely difficult for any law enforcement agent.

Otherwise, you might use a more private cryptocurrency like Monero (XMR).

You should be aware that some markets, such as AlphaBay, only accept Monero. The key reason such market participants prefer this cryptocurrency over others is its anonymity and lack of traceability.

Figure 1: On AlphaBay Market, Monero is the necessary and default payment option.


Remember that privacy has always been a big concern with virtual assets due to their widespread use in dark web marketplaces. When opposed to Monero, the fundamental qualities of the Bitcoin cryptocurrency make it a significantly less safe option.

Although Bitcoin transactions are not linked to the personal information of their users, they might be associated with user wallets. This undermines crypto’s privacy because law enforcement officers can readily expose a user’s identify via a variety of methods.

Monero, on the other hand, has a stealth address feature that makes it an ideal option for darknet transactions. Stealth addresses are one-time addresses that cannot be traced back to an earlier address.

If you’re wondering how to fund your wallet so you can start using Monero-only dark web marketplaces, be sure to read our article on how to buy Monero.

Otherwise, for Bitcoin, you’ll need to use a peer-to-peer exchange like LocalBitcoins (see below) or a wallet provider with an exchange built in, like Coinbase.

Figure 2: The LocalBitcoins Quick Buy page.


Obviously, some peer-to-peer cryptocurrency exchanges will ask you to produce identity in order to purchase coins on their network. Because you will be purchasing items from criminal darknet markets, you must ensure that your purchases are not traced back to your real-world identity – use a “coin mixer” to transfer the purchased coins to the marketplace of your choice.

Crypto mixing services are often extremely simple to use, in that you will offer your preferred marketplace’s deposit address to a coin mixing service, which will supply you with a new address after scrambling your coins to ensure that they cannot be linked back to your real world identity. You will be required to pay a portion of the proceeds from each transaction.

When working with peer-to-peer exchanges and crypto mixers, keep in mind that prices may fluctuate slightly between when you buy the cryptocurrency and when you use it to buy items on a dark web marketplace. This implies that when preparing to buy a specific goods, it’s best to swap more than you need to account for such a possibility – the additional coins may always be sold later.

Payment System Fundamentals in Dark Web Markets

On the internet, dark web transactions are constantly taking place between strangers. It goes without saying that dealing with strangers online necessitates extreme caution in order to avoid being defrauded, which is common in dark web marketplaces.

Figure 3: A trustworthy DarkOde Market dealer posts a scammer alert on the Dread forum.


The aforementioned fact compelled dark web administrators to devise a way to prevent vendors from collecting buyers’ payments and disappearing without delivering the things demanded.

One strategy to prevent the problem of vendor frauds is to use reputation systems that differ from market to market. For example, ToRReZ market employs a vendor ranking system that can assist buyers in making educated judgments by ensuring that they only interact with sellers that have a strong reputation as experienced vendors.

High-ranking suppliers are expected to protect their reputation as a valuable asset and are unlikely to jeopardize it by attempting to defraud users (See below).

Figure 4: The vendor rankings in relation to the things sold on the ToRReZ market.


However, this does not imply that vendor reputation is the only factor to consider when purchasing from dark web markets, as it has been discovered that a good reputation can be modified or completely falsified.

This leads us to the point of selecting a payment method that will not result in losses. The Escrow method is currently an industry standard on darknet markets, and it involves a trusted third party (often the platform’s admin) acting as an arbitrator between a buyer and seller if there is a disagreement.

The majority of dark web sites use a central escrow service, in which a third party holds the crypto you’re paying with until you hit the finalize button, indicating that you’ve received the products you requested.

If the thing you ordered does not arrive at its destination, you will contact the escrow provider to request a refund. This solution goes a long way toward preventing vendors from scamming customers at the point of good delivery, but it brings the new concern of the escrow agent disappearing with user funds – be sure to use only the suggested escrow sites to avoid losing your funds in this manner.

Alternatively, some dark web markets allow vendors with a stellar reputation to demand their consumers to Finalize Early. Escrow protection is not used in this manner.

The most secure alternative to all of the above is Multisig, which requires some technical knowledge and abilities to set up. It is also worth noting that not all marketplaces now offer this payment method, despite the fact that it shields purchasers from the chance that an escrow provider will take their cryptocurrency.

Escrow vs. Multisig vs. Finalize Early

A 2020 Digital Shadows investigation into the landscape of dark web markets revealed a link between payment methods and user popularity. On the surface, it looks that darknet platforms that offered all three payment methods (Escrow, Multisig, and Finalize Early) outlasted Empire Market, which exit defrauded people.

DarkOde and ToRReZ markets, which have now replaced the previously shuttered White House Market, accept both Multisig and Finalize Early payment methods. (See note below.)

Figure 5: A table of dark web markets that enable multisignature to reduce the possibility of exit frauds.


As a result, according to the Digital Shadows report, Dark0de Reborn, Canada HQ, Monopoly Market, The Versus Project, and ToRReZ market met the Dread guide’s criteria for using Multisig and avoiding exit frauds like Empire.

However, Icarus Market had at least three times the quantity of items on each platform as of September 2020, with over 35,000 listings. This figure climbed from 25,000 to 35,000 in just one month. Icarus also offered higher-than-average commission rates and accepted popular payment methods such as Bitcoin, Litecoin, and Monero.

Interestingly, the 2020 findings revealed that Monopoly and the now-defunct White House Market rated highly due to their stringent security measures including the Monero cryptocurrency. Despite the fact that White House Market never enabled multisig payments.

Escrow System

The escrow system, as previously stated, entails a dark web market retaining a user’s funds throughout a purchase. When you confirm receipt of the products you ordered as a user, you will request that the platform conclude the order and pay the seller.

Take notice that orders may be automatically finalized after a set amount of time if a user forgets to finalize manually. This helps to avoid situations in which suppliers are kept waiting for long periods of time before receiving their money.

You can always dispute the trade if you do not receive the thing you bought or if it is defective. This step will prevent the order from being auto-completed, and you will have the option to fix the issue with the help of the darknet market’s employees.

Once the market staff member contacts the vendor to determine a solution, they will proceed to carry out a variety of tasks.

As an example, consider the ToRReZ market: In circumstances when both the vendor and the buyer are unable to reach an agreement, the platform’s administrator will step in to decide which party will win the argument. Here are some actions that can be made to achieve that goal:

  • Conclusion of the dispute with no blame being placed on either party. This will also mean that funds will be sent back to the buyer as no one will have lost the dispute.
  • The dispute can be closed with blame placed on either the vendor or buyer. In this case, funds will be sent back to the buyer but the market’s admin will penalize either the buyer or the vendor by increasing the tally on the number of lost disputes. This will definitely have a negative effect on the online image of the user in question.
  • Finalization of the order where funds will be released to the vendor and none of the parties will suffer punishment from the market admin.
  • An order will be finalized after a dispute is lost – funds will be released to the vendor but the market admin will prescribe a penalty to either the buyer of vendor by increasing the tally on the number of lost disputes.
  • Sometimes, a split refund may be done by the admin. It denotes a scenario where funds get split between buyer and vendor according to the respective item’s refund policy. This will also mean that none of the parties will bear the burden of a penalty.

Otherwise, the buyer can also choose to close and finalize the Dispute without assistance from the site admin.

The Escrow System’s Drawbacks

The primary downside of Escrow is the chance that the guarantor’s trust will be abused. The case of AD0 vs. Sodinokibi showed a key flaw in escrow systems: even when transacting parties exercise due diligence and select a guarantee with a stellar reputation, the chance of being disappointed remains.

The AD0 arbitration was even more upsetting because AD0 had spent years cultivating their reputation as the go-to transactional guarantor. In fact, they had built such a name for themselves in the field that they were regarded as thought leaders in Escrow – their alias was frequently used as a byword for the Escrow process.

According to Digital Shadows, the AD0 case caused significant ripples in the dark web community, particularly in Russian-language underground spaces, where long-held views about the reliability of Escrow systems were eventually called into doubt.

A number of dark web markets have attempted to overcome the limitations of traditional Escrow systems by automating the process. For example, the now-defunct darknet marketplace MarketMS allowed consumers to dispute the quality of goods purchased and earn reimbursements.

The payments were not credited to a vendor until the 72-hour time limit following a successful purchase expired, according to its idea. During this time, the buyer could file an arbitration claim or elect to cancel the sale. This technique was favoured by suppliers who wished to create a positive image to consumers looking for trustworthy merchants.

Nonetheless, many dark web users appeared skeptical of adopting a completely automated Escrow system, saying they would only use it for small deals. It turns out that many cybercriminals prefer interacting with a third party rather to dealing with a fully automated system.

Another downside of the Escrow method might be perceived via the vendor’s eyes. Using an Escrow service means that the vendor loses money due to the transaction commission. Some Escrow service providers charge up to 10% commission on all transactions, which clearly reduces vendor profitability.

One of the hazards for dark web platforms that designate a specific user to function as their market’s guarantor service or offer an official system is that the platform will be required to accept financial responsibility for the said user’s activities. When such a guarantor fails to perform as expected, the dark web site will be held accountable.

Finally, it is difficult to identify people who offer Escrow services. This can be an issue when the buyer and seller do not have unlimited time to execute a transaction.

As a result, the parties involved in a buyer-vendor transaction may be forced to face lengthy wait times when contacting a guarantor, completing out papers, and waiting for the user to get online after finding time to play their role. In fact, the stress of serving as a guarantor is so intense that many dark web owners choose to employ others to do the task for them.

Multisig System

Multisig, also known as Multisignature, is seen to be a superior technology over conventional Escrow. It is usually used by users who want to improve the security of their Bitcoin transactions. Before a transaction can be broadcasted onto the blockchain, it must be signed by another user or users using a multisig address; the number of signatures is determined at the outset when the parties agree to create the address.

When exchanging funds for goods or services, Multisig allows users to set up two or three Escrow services. To provide an example, if Buyer A is willing to pay Vendor A, the buyer will clear a transaction to a Multisig address, which requires at least two signatures from three parties (Buyer, Vendor, and the Dark Web Market) in order to release the funds.

If the Buyer and Vendor cannot agree on who should receive the funds (for example, Buyer A demands a refund while Vendor A is confident that they fulfilled their duties and deserve to be paid), both parties can file an appeal with the Dark Web Market.

The Dark Web Market will sign in favor of either party so that after the dispute resolution process is completed, either Buyer A or Vendor A can redeem the money. The difference between basic Escrow and Multisig systems is that no one will disappear with your funds in Multisig because a transaction can only take place when two parties are involved (can be the Dark Web Market and Buyer A or the Dark Web Market and Vendor A or Vendor A and the Buyer).

There’s a number of factors that make Multisig outcompete basic Escrow services. They include:

  • Multisig prevents a scenario where markets and vendors exit scam buyers. This is a critical selling point considering how common exit scams on the dark web have become. With escrow, the market operators can decide to disappear with user funds without a trace.
  • In cases where a dark web marketplace is taken down for whatever reason, be it an exit scam, law enforcement operation or a devastating Distributed Denial-Of-Service (DDoS) attack, the funds held in Multisig will not be lost forever, stolen or confiscated by the police. As such, their owners may still be able to access if the buyer and vendor decide to contact each other and work together to redeem the funds – this will happen if they had already saved data about their transaction.
  • Multisig ensures that user funds remain protected is a threat actor succeeds to breach a dark web marketplace. In the case of basic escrow, an experience hacker will be able to steal user coins.
Figure 6: A Reddit user provides a simple illustration of why Multisig is better than basic Escrow.


Finalize Early

As a black market user, selecting Finalize Early means that you will give all of your money directly to the merchant with whom you are transacting. The seller will receive payment as soon as you place your purchase, similar to paying money to a street vendor and having them go around the block to get your merchandise.

Obviously, this is quite perilous given how easy it is to be duped by a vendor who chooses to take advantage of the trust that you have placed in him. A dealer who has not established a trustworthy reputation on the dark web market would most likely con you because they will have nothing to lose if you expose them.

Furthermore, if you have a buyer account that does not have a significant number of successful orders or a respected history, unscrupulous vendors would gladly take advantage of you.

You will easily lose your money since no one will believe you if you complain that you were cheated by a vendor through Finalize Early because your account will not have established enough respect on the platform.

It should be noted that some vendors have been known to persuade consumers to use Finalize Early by giving significantly lower prices for the same things that would cost more with traditional Escrow or Multisig systems. As a general rule, avoid this trap if you haven’t determined whether Finalize Early will work for you.

Despite the fact that consumers are constantly cautioned against engaging Finalize Early while dealing with relatively new vendors on a dark web marketplace, the above scenario is rather prevalent.

When Can You Finalize Early?

The most obvious answer should be when you are completely fine with potentially losing your dollars or your order to a scammer.

Assume you have $15 in your market wallet and see an appealing offer on the platform, such as a vendor offering to sell a tiny amount of drugs for the same amount you have in your wallet as an introductory offer. You can use Finalize Early to order the pills and risk a minor ding in your cash if they are not delivered to you.

Finalize Early can also be used when you are quite certain that the vendor you are dealing with will ship the things you order from them. This is a critical issue because you are better equipped to comprehend the foundation of your trust in such a company.

Take note, however, that a number of credible merchants have been observed to include Finalize Early as a criterion in their product listings but then swindle buyers. LucyDrop, who has a solid reputation as an LSD seller, is one of the well-known vendors.

LucyDrop only used Finalize Early while taking orders for three months with no buyer complaints. After a while, he stopped sending orders and fled with over $1 million in Bitcoin.

The preceding example teaches all purchasers that they must exercise caution while using Finalize Early, especially when dealing with reputable sellers.

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