Bisq is a decentralized, open-source, peer-to-peer desktop application that manages the exchange of cryptocurrencies and FIAT that requires no KYC.
And it is one of a growing number of increasingly popular DEXs......as in decentralized exchanges.
Launched in December 2014 with it's beta iteration two years later in April 2016.......go-live was in April 2019 since when it has achieved trading volumes in excess of $1 million a week.
It currently lists over 100 cryptocurrencies as available to trade.
So what is Bisq and how does it work?
Bisq is a trading protocol that allows individuals to deal/exchange directly with one another over the internet thereby eliminating the need for a trusted third party's exchange services.
The Bisq network is fully peer-to-peer, it requires no centrally-controlled servers and therefore has no single points of failure.
Bisq is not a company, it is a freely available software, it is a desktop application, not a browser-based web application.
There is no automatic order matching, Bisq users manually search for offers. This approach enables truly peer-to-peer trading settlement.
Bisq does not integrate directly with banks or currency payment systems. However, it's trading protocol does manage the process of buyers and sellers settling fiat payments.
Bisq is non-custodial but trades include deposits that are locked in a 2-of-2 multisig escrow. Any disputes are settled through a decentralized human mediation and arbitration system.
Bisq requires no registration nor centralized identity verification (KYC). The Bisq network is a fully distributed P2P network, built on Tor.
So why does Bisq exist and what is it's vision?
Bisq has set out to provide a secure, private and censorship-resistant way of exchanging bitcoin for national currencies and other cryptocurrencies over the internet.
Typically, most cryptocurrency exchanges are 'centralized' requiring users to store their coins on exchange servers. Coins stored on servers are at risk of being stolen so it's an insecure manner of storage. Bisq differs fundamentally from this approach by orchestrating trades between buyers and sellers without the need for the 'surrender' of coins to a central point.
Bisq users retain control over their own data, whereas most centralized exchanges require users to submit personally identifying information in order to set up an account, this in turn can then be used to link trading activity to the respective user. Again, any data held by a third or outside party will always be at risk of theft or misuse.
The censorship-resistantance aspect refers to the user's ability to trade voluntarily with a.n.other without the interference or intervention of any third party. Centralized exchanges are susceptible to this. By their nature, they must operate within the framework of a legal jurisdiction requiring them to abide by the laws and regulations of said jurisdiction. These could well include restrictions on who can trade and what personal information is required to be collected.
What Bisq provides is an exchange where users keep control of their funds, that provides private by default, and that defends freedom of transaction.
Where Bitcoin's motto is "be your own bank," Bisq's could be "be your own exchange."
So how do you get started with Bisq?
'Easy as' frankly........
- Download and run the Bisq application on your laptop or desktop computer
- Configure Bisq with your USD payment method details
- Browse Bisq's offer book for existing offers to sell BTC for USD
- Take an existing offer, agreeing to buy the seller's BTC for your USD
- Send USD from your bank to the seller's bank and indicate you have done so in Bisq
- Wait for your USD payment to arrive at the seller's bank
- Seller receives your USD and indicates they have done so in Bisq
- You receive the seller's bitcoin and the trade is complete
Is further development on Bisq to be anticipated?
Most recently, the exchange upgraded its multisig trade protocol and account reputation system with the aim of reducing further the trust required to use the exchange.
The decentralized exchange allows its users to trade both crypto and fiat pairs, using a combination of multisig escrows and an arbitration process to govern honest trading on its open-source and Tor-enabled, peer-to-peer platform.
In a blog post accompanying the platform's v1.2 launch, Bisq explained "that arbitration with the new trade protocol is vastly different from arbitration from before." The new protocol moves from a prior "2-of-3" to a revised "2-of-2 multisig escrow," with the third key that was previously used by arbitrators now being removed.
The new process works by having traders now sign a "time-locked transaction that pays out all multisig escrow funds" to a new "donation address."
The signature for the transaction can then published on the network (by either of the traders) if things go wrong. Bisq adding that "now that arbitrators have lost the third key in the multisig escrow, their power is greatly reduced—and the network can more easily recruit dispute resolution agents (mediators and arbitrators) as it grows around the world."
The exchange revealed that following "a handful of stolen bank account scams earlier this year," it had to impose "a 0.01 BTC restriction on fiat trades" while it looked into reevaluating its account aging conventions.
"Essentially, account aging for payment accounts that require account signing does not kick in until a user's payment account has been signed by another trusted user," Bisq explained in its announcement.
This only happens when an "untrusted peer proves their intention to trade honestly." However, once a user with an unsigned payment account buys Bitcoin from users with "signed" payment accounts and there are no issues, then trade limits are lifted.