Hodl Hodl, the peer-to-peer cryptocurrency exchange has recently enabled 2 -of-3 multi-signature contracts in trades through its trading platform. Previously the exchange had started to offer 2-of-2 multi-signature contracts.
2-of-2 multisignature offered by the crypto exchange Hodl Hodl requires the signature of the seller of the cryptocurrencies and exchange. The 2-of-3 multi-signature contract provides more leverage to the buyer in trading and dispute. A dispute can be when the buyer and seller agreed upon a given rate, but the seller attempts to back out. The 2-of-3 multi-signature contract means that every concerned party must consent to the movement of the coins while in 2-of-2 multi-signature contract there might have been a possibility of a scam when the coins were still in motion. Hodl Hodl stated that:
“In a regular 2 out of 3 contract, where everything goes well, buyer’s key is not needed — it only comes into play if the contract was disputed, and Hodl Hodl administrator resolved it in favour of the buyer. In this case, the buyer can sign a release transaction with his key and receive the funds without the seller’s participation. This is how the 2 out of 3 contract type works.”
After the Gt.Gox hack, cryptocurrency traders became more cautious to leave their digital assets with cryptocurrency exchanges. For cryptos, it is said that the traders should not leave their cryptocurrencies on the crypto exchange. But most of the exchanges do not conveniently allow the traders to do this. The new 2-of-3 multi-signature contracts implemented by the peer-to-peer crypto exchange Hodl Hodl will offer more security to the traders. Now buyers will be able to trade at Hodl Hodl with more confidence.
Hodl Hodl is a peer-to-peer cryptocurrency exchange which allows the users to trade directly with each other. The exchange even does not hold the funds of the users. The funds are kept with the multisignature escrow account which not only minimises the possibilities of crypto theft but also reduces the trading time. As the exchange holds neither digital assets nor fiat, so the exchange is not subject to the complex compliances. On the platform trades directly happen between users’ wallet, so the users do not have to open their identity to the exchange.