That is a fair point; the oracle problem persists. Someone must judge disputes, and judgment is simply another form of trust. However, we only intervene when requested. Escrow acts as a filter that helps both parties maintain perspective. Knowing a third party is overseeing the trade significantly increases the success rate.

Escrow makes trust smaller, distributed, and accountable. With a 2-of-3 multisig setup, no single party—buyer, seller, or mediator—can take the funds alone. You no longer have to trust one stranger completely. Instead, you trust that two of three parties will not collude and that the mediator values their reputation. The mediator is only involved during a dispute.

In usual trades, the buyer and seller sign off, and the mediator does not touch the funds. When invoked, the mediator provides a bounded decision based on evidence rather than acting as a black box. The alternative is not "trustless" trade; it is either blind trust or no trade at all. Courts and arbitration face the same oracle problem, but they are more expensive and slower. The goal is to require less trust, place it better, and maintain a paper trail. Remember, perfect is the enemy of good.