Bisq Exchange Review: P2P Bitcoin Exchange

Description

Bisq is a decentralized peer-to-peer exchange that allows you to buy and sell bitcoin using an open-source desktop software without KYC requirements. The exchange runs on a distributed network of nodes, meaning that there is no central server that could be hacked or taken down by a single entity. This makes Bisq more resistant to censorship and seizure, and provides users with greater privacy and security.

Benefits of Bisq

Bisq bitcoin p2p exchange provides several benefits for users trading bitcoin. These are some of the benefits:

One of the most significant advantages of using Bisq is its decentralized nature. Unlike centralized exchanges that require a middleman to facilitate trades, Bisq is a peer-to-peer network of users that operate without any central authority. This means that there are no intermediaries, no single points of failure, and no central control over the exchange, which results in greater privacy, security, and control over funds for users.

Bisq is code, not a company. It is an open-source project organized as a decentralized autonomous organization (DAO) built on top of bitcoin.

Another key advantage of using Bisq is its security model, which uses multi-signature transactions to ensure that funds are not held by any single party. Furthermore, Bisq’s security model ensures that you hold the private keys to your bitcoin wallet, which means that you have complete control over your funds.

Unlike centralized exchanges that require you to go through a KYC (know your customer) process and provide personal information, Bisq is a no KYC exchange, which does not collect your personal data. Instead, you can trade without revealing your identity or personal information to anyone, which is a significant advantage for those who value their privacy.

In addition, Bisq network uses Tor, a free software that helps to protect users’ online privacy and anonymity. Tor ensures that users’ internet traffic is routed through a network of servers, making it difficult for anyone to track or trace users’ transactions.

How to Buy Bitcoin on Bisq

You need to download and install the Bisq software on your computer. After that, you can create accounts, and browse offers to buy or sell bitcoin on the Bisq network. Bisq requires a bitcoin security deposit from both trading partners as a form of escrow in order to encourage both trading partners to behave in good faith. This is also why you must have bitcoin to start trading on Bisq. After a trade is completed, both parties leave feedback for each other, which helps to build reputation scores for each user.

Bisq uses multisignature escrow to ensure that funds are not held by any single party to secure your funds. When a trade is initiated, the buyer and seller each deposit their funds into a 2-of-3 multisignature escrow address. This means that two out of three keys are required to move the funds, with one key held by the buyer, one key held by the seller, and the third key held by Bisq. This ensures that neither the buyer nor the seller can unilaterally control the funds, and that Bisq acts as a neutral third party to resolve disputes if necessary.

Once the funds are locked in the multisig escrow, the buyer sends their payment to the seller using a payment method agreed upon by both parties. The seller then confirms receipt of the payment, and the buyer has a predetermined amount of time to review the received bitcoin and either release the funds to the seller or initiate a dispute. Here’s a list of common Bisq payment methods.

If there is a dispute, the case is brought before an arbitrator who has access to the third key. The arbitrator reviews the evidence provided by both parties and makes a decision on how to resolve the dispute. If the arbitrator decides in favor of the buyer, the funds are returned to the buyer. If the arbitrator decides in favor of the seller, the funds are released to the seller.

Because Bisq is a desktop-based application, its Bisq Android and Bisq iOS apps only allow you to receive essential notifications like trade updates and offer alerts even when you are not near your computer.

Bisq Fees

When using the Bisq platform to trade bitcoin, there are some fees that you should be aware of. The trading fees are calculated as a percentage of the trade size and vary depending on whether the user is a “maker” or a “taker”. Makers pay a 0.1% fee, while takers pay a 0.7% fee, if paid in BTC. However, if paid in BSQ (the native crypto of the Bisq network), the fees are approximately half of the BTC fees.

In addition to the trading fees, you should also expect to pay mining fees for on-chain transactions and a deposit to lock into the multisig escrow. The deposit is fully refundable upon successful completion of the trade. Overall, while there are some fees associated with using Bisq, they are generally lower than those charged by centralized exchanges, and you have greater privacy, security, and control over your funds.

Is Bisq Legit and Safe?

Bisq network is a legitimate and decentralized bitcoin exchange that has been around since 2014. It has security measures in place, such as multi-signature escrow and decentralized arbitration. Bisq operates on the desktops of its users, as it has no central servers. This makes it difficult to surveil, censor, shut down or hack. However, like any exchange, there are risks involved, especially when trading directly with other individuals as the trustworthiness of the trading partner can vary. Conduct thorough research and exercise caution when trading on any exchange.

Differences Between Bisq P2P and Other Centralised Exchanges

• Bisq P2P does not hold any bitcoin. All bitcoin used to trade is stored in 2-of-2 multisignature addresses that are completely owned by the trading peers.
• Bisq possesses no national currency. Traditional banking and payment systems are used to move national currency directly from one trader to the next.
• Bisq data is sent over its own secure peer-to-peer network, which is built on top of the Tor network. There are no central servers. Because there are no data honeypots, large-scale attacks on customer information databases are impossible.
• Bisq knows nothing about the traders who utilize its network, and no information about who trades with whom is stored.
• Bisq does not require registration, which protects your privacy and allows you to start trading right away.
• Bisq is code, not a company. It is an open-source project based on Bitcoin that is organized as a decentralized autonomous organization (DAO).

Disadvantages of Bisq

Bisq comes with certain drawbacks that need to be considered.

One of the main drawbacks of Bisq is its higher fees compared to centralized exchanges. Additionally, Bisq’s trading volume is lower than centralized exchanges, which can result in wider bid-ask spreads and less liquidity in some countries.

Bisq’s user interface and trading process are also more complex than centralized exchanges. This can make it challenging for new users to navigate and understand the platform’s functionality. Furthermore, Bisq is currently only available as a desktop application for Windows, macOS, Debian, Ubuntu, and Linux, which means that it cannot be accessed from mobile devices. This can be inconvenient for some users. Fortunately, you can use a mobile Matrix client to access the Bisq room for people looking to buy and sell Bitcoin.

Bisq operates without central servers, meaning you must keep your offers active by staying online. If your computer goes offline, your offer will get removed from the distributed offer book. However, once an offer is accepted, continuous online presence isn’t required, but both parties need to periodically check in to complete necessary actions like payment and confirmation of receipt. If the Bisq application goes offline, the offer disappears but reappears upon restart.

Finally, Bisq’s user base is predominantly composed of experienced Bitcoiners. This can make it difficult for newcomers to find guidance and support, potentially hindering wider adoption. Additionally, the buying and selling process on Bisq requires a bit of learning and understanding of decentralized trading mechanisms. This can be a barrier for users who are not familiar with the technical aspects of cryptocurrency trading.

Bisq Alternatives

More Information

• Bisq website