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Bisq Review: Peer-to-peer network

bisq

Bisq, formerly known as Bit Square and previously called Bitsquare, is a decentralized Bitcoin exchange. The exchange was founded in 2014 by a renowned Austrian cryptocurrency wizard Manfred Karrer to eliminate the need for intermediaries in monetary transactions executed on the platform. It is a peer-to-peer (P2P) exchange that embraces all Bitcoin and blockchain technology features – decentralization, transparency, and anonymity.

Bisq Review: Peer-to-peer network 1

The exchange doesn’t hold user funds but relies on a distributed multi-signature escrow system to manage transactions effectively and guarantee security Bisq exchange. By placing an order on Bisq’s order book, the buyer sends the currency equivalent of the chosen cryptocurrency to a smart contract address controlled by the seller. After the order is broadcast to the decentralized network, a Bitcoin seller sends his bitcoins from a multi-signature wallet. The escrow system releases payment after detecting that both sides have sent the fiat currency and cryptocurrency to their accounts. Bisq doesn’t charge any commissions for completing trades on its platform but levies a 1% fee on the amount the seller receives from the buyer.

What Is Bisq?

Bisq is a peer-to-peer exchange that allows you to trade crypto or fiat with individuals worldwide. The firm was founded in 2014 and was previously known as Bitsquare until it changed its name due to trademark problems.

BIsq is a decentralized autonomous organization (DAO). Stakeholders in the Bisq network choose the exchange’s future through voting. Code is also open-source, allowing developers from all over the world to contribute.

Bisq Review: Peer-to-peer network 2
Source: Bisq.network

One-time registration procedure

The Bisq marketplace is accessible globally if a user has an Internet connection and a web browser supporting HTML5. The exchange requires a one-time registration procedure. Users can buy and sell Bitcoins for fiat currencies or altcoins using bank transfers, credit cards, cash, and a wide range of alternative payment methods.

No single point of failure

Bisq is one of the few decentralized exchanges that have been in continuous operation for more than four years. It offers a P2P exchange network without any central points of failure and no single control point. The platform ensures security as it doesn’t hold customer funds but allows trading without requiring any personal information. Trading on Bisq is anonymous as users don’t need to disclose their identity at any point in time.

Bisq Review: Peer-to-peer network 3

Bisq wallet team has been rather silent during the recent cryptocurrency price boom, but they have been actively supporting the Coins Bisq exchange and working towards implementing new features. The decentralized trading platform recently announced integrating support for the decentralized finance (DeFi) protocol, Swap and Keep Network.

Low liquidity drawback

Bisq is a promising next-generation cryptocurrency exchange that offers some of the best features in the market. The platform’s low liquidity remains one of its drawbacks, but it is expected to improve as more users embrace it.

Decentralized crypto exchanges such as Bisq are the future of the cryptocurrency market. Bisq allows traders to control their privacy and funds without relying on third parties like other decentralized platforms. However, the platform’s lack of liquidity remains its main drawback, but it is expected to improve in this regard with time.

Bisq remains one of the few decentralized exchanges with a working platform and more than four years of continuous operation. The high level of security it offers makes Bisq an attractive option for first-time traders, but its low liquidity is likely to keep many away at this point. Still, should the decentralized exchange market mature enough to the point that liquidity becomes less of a concern, Bisq could become one of the biggest players in this sector.

Integration with Keep and Swap

Bisq is not a terrible option as a decentralized exchange, but it’s been struggling to maintain liquidity due to a lack of attention from the press and general public. This may change as they have recently made some news by integrating with key players in the market such as Keep and Swap and adding a credible payment method. Here is a chart showing BISQ volume over the last 30 days.

Bisq lets you privately buy and sell cryptocurrencies and fiat on your terms. Our Bisq review covers exactly how this exchange works, why it’s different, and how to decide if it’s right for you.

Bisq Pros & Cons

Pros

  • Lower trading costs on Bisq trades than other exchanges
  • There are no Know Your Customer (KYC) standards for truly secret trading.
  • Maintain complete control over your personal finances
  • It supports a wide range of currencies and crypto trading pairings.

Cons

  • Requires a security deposit of at least 0.001 BTC.
  • It’s not the most user-friendly website I’ve ever seen.
  • It might take longer to complete a trade on an exchange with several parties.

Peer-to-Peer Trading

BISQ allows you to trade Cryptocurrencies with other users without the need for a third party. You can exchange dozens of cryptocurrencies, including Bitcoin, Dogecoin, and many others.

  • BTC
  • LTC
  • ETH
  • BCH
  • DOGE
  • SOL
  • XMR

Bisq also supports national currencies, making them globally friendly and virtually immune to geo-restrictions.

Technically, you may trade in any cryptocurrency or currency because Bisq is entirely peer-to-peer. However, if your obscure altcoin or fiat isn’t readily accepted, you’ll have a harder time locating trading partners.

No automatic order matching

The primary distinction between trading on Bisq and other exchange platforms is that there is no automatic order matching.

You don’t just submit a trade for 1 ETH and have instant approval. Rather, it would help if you browsed the peer-to-peer marketplace for offers to buy ETH and locate someone selling BTC.

You may also create offers to describe the cryptocurrency you want to purchase and the offer price. You’re always buying or selling Bitcoin with Bisq; BTC is paired for every trade.

You accept an offer, send money to the seller, and receive your cryptocurrency when the seller disburses their funds. The same procedure applies for selling your crypto; you post an offer on the Bisq network, wait for buyers to respond, and then complete the trade.

Multi-signature-protected wallets

The benefit of using a trade settlement platform such as Bisq is that you can remain private. The disadvantage is that trade settlements take longer than automatic market makers (AMMs). However, keeping your identity private and protected from a fraudulent activity is advantageous. To increase trading security, Bisq utilizes security deposits from buyers and sellers. Furthermore, funds are kept in multi-signature-protected wallets, which means you must submit an identity verification.

No KYC requirements

Cryptocurrency exchanges must adhere to know-your-customer (KYC) and anti-money laundering (AML) standards. Typically, this implies you’ll have to confirm your identity using these platforms by uploading a copy of your government ID. Many exchanges, like Coinbase, also provide information to the IRS.

Even if you find decentralized exchanges that don’t force KYC verification, non-verified users have lower trading and withdrawal restrictions. This is all in the name of security. However, these requirements substantially hinder your privacy protection and subject them to scrutiny by a central authority.

BISQ does not require users to register or verify their identities. Furthermore, rather than storing data on Bisq servers, you keep it on your computer’s hard drive. This exchange also uses tor to allow private interactions among its Network’s nodes. On the Bisq website, you may discover more information about the company’s privacy policies.

Security

Using a peer-to-peer network to trade bitcoin and fiat may appear to be a breeding ground for fraud. However, unlike traditional exchanges, Bisq has several security measures in place.

To begin, you’ll need to acquire Bitcoin to trade on Bisq. Because each exchange requires a BTC security deposit from the buyer and seller, this is true. Buyers must post at least 15% of the trade value, with the minimum amount being 0.001 BTC (worth about $50 now). Sellers must also post at

After that, the funds are held in a multi-sig address until the seller confirms they have received their money and want to release it to the buyer. To minimize chargebacks, Bisq restricts fiat payment options. Because Cash App, PayPal, and Venmo make it easy for purchasers to request chargebacks, they aren’t available as payment methods.

Bisq restricts trading on accounts with less than two months of history. This implies that brand-new accounts can’t purchase or sell significant quantities of bitcoin on Bisq to defraud other users. Signing is also required for certain accounts, which means a trusted peer on the Bisq Network must authenticate a new account before it starts the aging process.

Compared to centralized exchanges, trading is very secure between these security measures and Bisq’s trading rules. If something goes wrong, you begin remediation by chatting with your trading partner. Bisq also has mediation and arbitration steps in which community-appointed members help oversee a resolution. Hence, rest assured of security and support before you start trading.

Decentralized Exchange contributor rewards

Because Bisq is a DAO, it relies on the participation of its members and stakeholders to function properly and help users to start trading.

Bisq Review: Peer-to-peer network 4

Source: BISQ.Network

To encourage community involvement, Bisq offers contributors the opportunity to earn BSQ, the platform’s cryptocurrency, for becoming active. According to Bisq, “This ‘coloring’ allows the Bisq application to identify these Bitcoins as BSQ.”

You’re essentially getting compensated in BTC when you improve Bisq, making it a better network. There are several routes to get involved, including:

  • Creating videos and tutorials about how to use Bisq
  • Blog postings about Bisq
  • Translating and maintaining the Bisq website and its documentation is made easy with Liferay.
  • Creating software to process data or assisting in the network’s technical development

If you can figure out a way to assist Bisq in growing and flourishing, you might be rewarded BSQ for your efforts. As a decentralized autonomous organization (DAO), Bisq also has established document maintainers, administrators, and moderators that you may apply for.

One of the benefits of using Bisq over centralized exchanges is that its network fees are often lower than many centralized exchanges’ trading fees.

Features of Bisq decentralized exchange

Users of Bisq have the following primary functionality at their disposal:

Ease-of-Use

The relatively easy interface of Bisq allows traders to begin trading on it in less than 10 minutes. Because of their simplicity, most decentralized exchanges have a complicated appearance. Despite switching to decentralized exchanges, many traders are turned off by the complexity of the interfaces. The creators of Bisq have successfully handled this problem, creating a user-friendly and simple design.

Security

Security as mentioned earlier, decentralized exchanges are more secure than conventional exchanges. Centralized exchanges require extensive verification of personal documents and bank cards to facilitate trades. This is the case with most countries that have adopted KYC laws. On the contrary, Bisq does not require any information about its users because it is completely anonymous.

The security of the Bisq exchange is a top priority, which is why it has built the system with traders’ safety in mind. P2P networks, on the other hand, come with their risks. Because it is a decentralized exchange, it does not save traders’ money or stores any personal information on its servers, and so traders are

Privacy

The Bisq exchange is entirely open and transparent, with no personal data or information required from users. Trading on the Bisq market is thus completely private.

Functionality

On Bisq, the need for arbitrators is inherent to guarantee that everything runs smoothly; owing to this, the process is more complicated. The platform’s functions are easy to comprehend. Transactions may take a long time based on traders’ payment options.

Coins and fiat currencies

Bisq is a peer-to-peer cryptocurrency exchange that supports numerous altcoins. Traders can see a full list of supported coins and altcoins on the dashboard of the exchange’s website.

Trading fees and withdrawal fees

The Bisq exchange has a little higher deposit and trading costs per transaction. However, traders appear to be okay with paying a bit more in fees as long as they can quickly trade on a reputable platform and trade almost all major crypto pairs.

How to open an account on Bisq

If you’re looking to get started on Bisq, there are four stages to the procedure:

  • Go to the Company’s website, where you can download Bisq for Windows, Mac, or Linux.
  • Write down your wallet seed and keep it somewhere secure. You may also back up your Bisq data on your computer or a spare hard drive.
  • Create a payment account that includes various bank accounts, money-transfer services, and altcoin accounts.
  • Begin trading with Bitcoin to secure a portion of your trade’s deposit.

On the other hand, a centralized exchange is not suggested for obtaining your first Bitcoin. This is due to the possibility that a hack or breach on a centralized exchange might lead to your current centralized wallet address being linked with your new Bisq address.

Instead, the Bisq team offers practical guidance for getting your first Bitcoin without becoming centralized. These suggestions include utilizing Bisq’s informal market for small BTC trades, borrowing from friends, or using a Bitcoin ATM in your neighborhood.

These precautions make Bisq less attractive for novices than creating an account with Coinbase and trading with funds from your bank account. However, if you value privacy and decentralization, this is the way to go.

Final thoughts

Bisq appears to be a valuable platform for trading Bitcoin and other major cryptocurrencies from the look of things. Because of the decentralized nature of the exchange, it is a highly secure platform that does not require third-party platforms to sell bitcoins.

On Bisq, users can trade for a small fee in Bitcoin. Trading on the platform requires no prior technical knowledge or experience. For example, suppose traders are uncomfortable using a P2P network and paying a significant fee. In that case, Bisq exchange might be an ideal place to try out – 100% anonymous, safe, and decentralized that every crypto enthusiast would love.

The biggest issue with Bisq is that you must have Bitcoin before trading on the platform. People who are new to trading might find this arrangement inconvenient. However, the Bisq developers offer steps for getting your first Bitcoins without using a centralized exchange.

FAQs about Bisq

Why does Bisq require a security deposit in BTC?

Security deposits create strong incentives for buyers and sellers to follow the rules of Bisq’s trading protocol. Deposits are locked into multisig escrow along with the Bitcoin being traded and are returned to each user when the trade is complete.

What are trading limits? How much bitcoin can I buy/sell at once?

Trading limits vary based on payment methods since some are more secure than others.

Relatively safe payment methods such as Japan’s Furikomi and Australia’s PayID are set to allow trades of up to 1 BTC, but other payment methods such as Zelle and SEPA have a cap of 0.25 BTC. See the full list of payment methods and limits.

Altcoins cannot charge back, so the limit of all altcoin trades is 2 BTC.

How does Bisq protect my privacy?

Bisq is standalone, open-source software that you can inspect before running on your machine, and as a result, you don’t have to trust that any server is logging your personal details (as you would in the case of a website).

As for the trading process, your payment information is stored locally on your machine, and only your trading partner (and your mediator or arbitrator, in case of a dispute) can ever see it. All data exchanged between users is encrypted and signed.

To transmit data from one user to another, Bisq uses a P2P network built on top of Tor, which provides a high degree of anonymity. The user doesn’t need to do any additional work for all of this to work—it is all integrated into the application.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
Shawn Du'Mmett

Shawn Du'Mmett

Former IT development and consultant, remote team and collaboration expert, PM, CCO, writer, dreamer, idealist looking to collaborate with global teams on a global teal/turquoise organisation. Shawn's dream is working together openly, to get what writers need and want, and to solve biggest global problems. He is building a collaboration system from the start that everyone can own and define, allowing them to work together, to decide how it works and to their highest ideals.

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