PAYSAFE is how we label payments made through multisig wallets because it defines better what they really are for. You can first read the extended explanation below, or jump straight to the “One minute video tutorials” section. Those will give you a quick idea on how to easily set up and use multisig wallets, and then you can read further details here.

Cryptocurrency payments have many advantages, but one disadvantage is that you need to trust the receiver if you prepay for some service, especially if it is an individual and not a company. The easiest and safest is to always pay the host/provider in person, but in many cases this is not possible or not desired.

On a traditional booking platform like Airbnb, the reservation process would go like this:

Guest places a reservation (currency exchange fees, etc) -> payment to Airbnb -> Host receives payment (minus fees)

A multisig wallet eliminates the need of third party intermediaries, and gives full control to its users. The reservation process would look like this:

Guest places a reservation (no fees) -> PAYSAFE – payment to multisig wallet (controlled by host and guest) -> Host receives payment (no fees)

It is clear from both examples that a multisig wallet is the cheapest option that lets you retain control over your funds. Not only that, but there are many wallets available, easy to set up and use, and they are free! So, what are multisig wallets?

Multisig stands for “multi signature”. Without having to get too technical, they are shared wallets. For our purposes (reservations, prepayments), they would be shared by the host (provider) and the guest (customer).

They work similar to any other wallet in the case of receiving funds. The wallet has an address, and anyone can send funds to that multisig address.

The difference comes at the time of getting funds out of the wallet (the host getting paid). The host wants to send the funds from the multisig wallet to his own private wallet. Like most wallets, it is as easy as clicking on Send and inserting the host’s private receiving address in the multisig wallet. The multisig wallet would automatically hold the transaction and ask the other party (the guest) to confirm it first. This prevents any of the users, host or guest, to get funds out of the multisig wallet without permission from the other party.

The only requirement is that both the host and the guest install the same multisig wallet. There are many to choose from, especially for bitcoin. Installing them takes just a few seconds because there are no requirements or accounts (emails) to set up. And since they are free and don’t take up much space, any user can have several different wallets with multisig capabilities. This gives great flexibility and freedom. A few popular wallets with multisig capabilities are Bitpay, Bluewallet, Bitcoin.com and Guarda. Many users already use them, but never heard about multisig or what it is for.

In the following paragraphs we will explain in general terms how placing a reservation would work in practice, what benefits (advantages) there are using multisig, and the possible disadvantages.

General way to place a reservation using multisig

Firstly, we assume that both host and guest use the same multisig wallet. In case they would not, one of the two could simply download and install the wallet in a few seconds. In this example, we will assume that both use the Bitcoin.com wallet and use bitcoin. Although below are several steps described, please trust us and realize that in practice this process could take maybe less than a minute (check the short video tutorials section). Now:

1. The guest has placed a reservation. The host has indicated a requirement to pay a 50% deposit (prepayment) to hold this reservation.
2. The host receives a notification that there is a new reservation. The host proceeds to create a new multisig wallet within his Bitcoin.com app. This will always be a 2-2 multisig, meaning that there will be 2 users in it, and there will be 2 signatures required to take funds out. Within seconds, the wallet is generated and the app creates an invitation link.
3. The host invites the guest to join this wallet sharing the link via our internal messaging system.
4. The guest receives the message and uses his Bitcoin.com wallet to join a new multisig wallet, in which the previous invitation link will be pasted. Up to this point, everything has been been harmless, since no funds have been moved yet. There is no risk in just joining a wallet, but the guest must verify that it is indeed a 2-2 multisig.
5. The guest now sends the required prepayment (50% deposit) from his/her private wallet to the new multisig wallet. Our system will let the guest know how much bitcoin to send (on the payment page from the reservation). The funds will arrive at the Bitcoin.com multisig address and both host and guest will be able to see it. This is confirmation for the host that the guest has paid the deposit, but the funds are not yet in his full control.
6. Usually at check- in case of vacation rentals – the host will want the full payment. The host will create a transaction in the multisig wallet to send all the prepaid/deposited funds to his own private wallet. The guest will be notified in his Bitcoin.com wallet and will confirm (agree) to release the deposit because he has checked in and has verified the place, and the host receives payment of the deposit in his private address. The remaining amount (the other 50%) can now eaasily be paid directly from the guest to the host without using the multisig wallet. Either the Bitcoin.com app itself or our direct payment gateway can facilitate this second payment.
7. Both are happy.

Advantages: What has been achieved with this method?

• The guest does not need to trust the host with his prepayment. Since the prepayment went to a multisig address, the host can’t steal those funds.
• The host can see that the guest has paid the predeposit to the multisig, so he can feel confident to maintain the reservation dates blocked for this guest. Asking for a deposit deters the guest from cancelling easily or “no shows”, because the guest would have lost those funds.
• Neither the host nor the guest can now steal the funds from the multisig wallet, since each will always be asked for permission from the other before a (send) transaction can be executed.
• No intermediaries are needed, which means that no percentage of profit is taken away from the host. There are also no currency exchange fees, since cryptocurrencies have no boundaries and can be used worldwide. The few extra manual steps needed to use a multisig are more than compensated by the gains realized not having to pay any fees.
• Multisig wallets are independent wallets and are only used here to receive payments for a reservation. The private funds of users remain in their private wallets, whether they are in Coinbase, Binance, etc, or in their self custody wallets. This means that there is no need to somehow “link” a private wallet to a multisig (which can also be done in some cases, but don’t recommend).
• Some popular wallets already include the possibility to create multisig wallets, so many users won’t need to install new software or learn a new interface. Besides multisig, some also offer in-app currency exchanges, in-app shopping, or connections to centralized exchanges or cold wallets, adding even more functionality.
• Payments can be done in parts. If someone is new to multisig, he can first make a small payment to test it out, and once understood, follow with the rest. Our payment system allows you to always calculate the exact amounts to be paid. This sort of partial payments are impossible with traditional systems.
• No accounts need to be set up. Downloading and installing a wallet app does not require any sort of registration.
• Lower risk of losing access compared to regular wallets: these multisig wallets, used here for one time payments, can be considered disposable (use and delete) wallets. This means that the time they exist is relatively short, in turn making the time span in which one party could lose access to the wallet shorter.
• Flexibility for a new world of opportunities with this method. Multisig wallets are not restricted to booking platforms. They could also be used:
  • In online marketplaces in which you need to pay a seller in advance
  • For yourself, using two different devices to secure your funds in your own multisig wallet, meaning that if one device would be stolen or hacked, they would need the other device as well to take funds out
  • In many business scenarios in which funds are shared between owners and should only be released when enough owners agree to it
  • To share funds with your family members and control spending
  • And much more…

Disadvantages and worst case scenarios

Some of the “worst case scenarios” described below are very theooretical and would not really make sense in practice. However, we explain them here to dissipate possible doubts.

• The guest, before checking in, refuses to release the deposit in the multisig wallet because he had to cancel unexpectedly, or just out of bad intentions. In this case, the host could, in the worst case, not get income for the days blocked for that reservation if nobody else places a new reservation in time. The guest would lose the funds as well (remains in the multisig), so he doesn’t gain anything. It is an unlikely scenario, and those users would quickly be removed from our website. Remember that most blockchains are public and you have proof of payments and bookings to take legal action. A more realistic scenario is that the host has indicated a cancellation and refund policy, and will refund the payment if those conditions are met.
• The guest, after checking in, refuses to release the deposit in the multisig wallet because he doesn’t like the place, something is missing, or simply does not want to release them. In this case it is basically a case of trespassing, since somebody is entering someone else’s place without permission (payment). This would be a double lose situation for the guest, since legal action can be taken, and the predeposit is lost anyways. Again, this is a highly unlikely scenario (and obviously those guests would be removed as well from our platform). The more realistic scenario when the guest does not like a place is to leave a bad review.
• The host, after receiving a predeposit in a multisig, gets a cancellation request within the time period allowed by him, but does not want to return the funds to the guest. The guest could potentially lose that predeposit, but the host does not gain anything, since he can’t take funds out of the multisig. A very bad review would possibly be placed by the guest, and, after investigation (crypto payments are generally easily traceable), we can remove this host from our platform. Plus, since payments, conditions for refunds, and dates are verifiable, legal action can be taken by the guest. Again, this is a very unlikely scenario requiring an evil (and very stupid) host.
• The host is a total scammer and has placed a listing for an accommodation that does not exist. He requires a predeposit to a multisig, and a guest has paid that. Now the guest has lost that predeposit and the time spent going to the accommodation, because it does not exist. The host has not gained absolutely anything, which is why this scenario is, like all those before, highly unlikely, since the host has spent time and effort to upload a listing, setting up wallets, and communicating with guests, just for fun. When there are no real gains to be made, scamming and lying does not make much sense. Even in this case, legal action could be taken. Furthermore, a good practice is for guests to always double check a host and its accommodation, since many times accommodations are advertised on many other platforms, and usually they include real reviews.
• Host and guest might have apps that support multisig, but are different. For example, one uses Bluewallet, the other Bitpay. This can and will happen. A problem could arise if neither wants to install a second app as to be compatible with the other. This scenario could happen, but if people are really interested in using cryptocurrencies safely, spending a minute downloading and installing new free app should not be viewed as a huge inconvenience. However, if host and guest don’t reach an agreement, the reservation can be cancelled (if already placed), life goes on and nobody lost funds.
• The cryptocurrency wanted to be used by both the host and the guest is not supported by any multisig wallet. This scenario can happen, especially if using private coins. Most multisig wallets are designed to support BTC. A few also support LTC, BCH or DOGE, and one even exists for XMR. Multisig wallets also exist for ETH, which allows support for USDT and all other ERC-20 tokens. And there is even one wallet that supports all of those and more, and uses the same interface for every coin. Check our sections about “Some freely available multisig wallets” and “One minute video tutorials” below.
• Multisig is not new technology. In fact, it is almost as old as bitcoin itself, but it used to be difficult and technical to use. However, nowadays there are many options available with pretty intuitive user interfaces that makes using multisig very easy even for less experienced crypto users. The disadvantage, despite its functionality, is that it is not yet widely used, not known or not understood. At Staynsee we want to exploit this and be the first platform to popularize the use of multisig.
• In any case, using multisig in this way always requires a few manual steps. The security, control, and zero added fees (besides the usual blockchain fees) should really outweigh the little extra work required. Once used to it, it is done in a breeze. No need to be an expert in crypto at all.

Things to note

• Whenever a multisig wallet is used it is very important that both parties confirm that it is indeed a 2-2 multisig wallet. Never join a 2-3 multisig wallet (or any other format different than 2-2), even if the third party would use our name or logos. We will never interfere. Read our general recommendations section below.
• We described a situation in which the host initiates the creation of the wallet. In fact, the guest can initiate it too. There is total flexibility in the way people want to pay each other.
• Users exhibiting bad behavior can, and should be reported. After some time, those users will tend to dissapear quickly.
• For the less experienced, it would be beneficial to test the installed multisig wallet beforehand. To see how it works, you can set up a multisig wallet using two different devices that you own (laptop+phone) and send a small payment to it first. Then send those same funds out of the multisig back to your private wallet again.
• We only offer recommendations and possibilities. As stated many times, we do not take part in payments between users and are not responsible for any aspect of those.