An escrow contract is a financial arrangement where a third party temporarily holds assets on behalf of two other parties involved in a transaction. This is designed to protect both parties and ensure that the terms of the agreement are met before the assets are released. In the case of cryptocurrency, the escrow service holds the digital assets until certain conditions are fulfilled. For example, a buyer may deposit cryptocurrency in an escrow account. The seller then delivers the agreed-upon goods or services. Once the buyer confirms receipt and satisfaction, the escrow releases the cryptocurrency to the seller.This mechanism helps prevent fraud and builds trust between parties who may not know each other. Additionally, smart contracts can automate escrow arrangements, executing transactions without the need for human intervention once the conditions are met. Overall, an escrow contract is a practical tool that enhances security in transactions. It ensures that each party honors their commitments before the exchange is completed.