Article written by Riya Thakur
BitHalo and its sister-client, BlackHalo, allow for the creation of secure multisig wallets that then form the basis for the platform’s extensive smart contract applications. It was the first software in the world to use and implement multisignature wallets.
BitHalo’s design carries implications for peer-to-peer and marketplace-style e-commerce, enabling buyers and sellers to exchange goods and services using secure, unbreakable contracts. As well, BitHalo gives parties who may not trust or even know each other the ability to engage in fair exchange without the risk of financial loss or fraud.
In order to enforce accountability between two parties that want to establish a contract, BitHalo requires proportional escrow deposits that act as a form of personal insurance.
As shown below, the user interface allows those drafting the contract to set the amount they want to put in escrow and the length of the contract duration. Each party puts in an equal amount, making one side just accountable for the success as the other.
As David Zimbeck explained:
“Lets say you wanted to employ somebody at $30 an hour. Employees have been known to not work hard and have been known to flake and conversely in many cases, employers don’t pay and hold power over employees. So to solve this both employee and employer put up $60 in escrow (a joint account with two keys). Then the employer can pay on the hour or on the milestone for work completed. If either party tries to cheat the deal then they actually lose money.”
BitHalo is set for an expansive period that will see the completion of BlackHalo’s public beta and the completed development of the BitHalo program. Once finished, the application of smart contracts will be available to both bitcoin and blackcoin users.
Another aspect of the overall project is NightTrader. Currently under active development and part of the BlackHalo beta, the decentralized exchange and trading platform gives users a marketplace for conducting contracts and performing trades of any two currencies.
According to David Zimbeck, NightTrader is an idea of decentralized exchange based on microtrading. Similar to his proposal for barter. Both parties form a Halo contract in Blackcoin and then trade smaller amounts of any two currencies of their choice. A simple yet elegant solution that does not require trust.