Cryptocurrency trading these days largely takes place on cryptocurrency exchanges. These exchanges are of two types- centralized and decentralized. Centralized exchanges are like stock exchanges in the sense that they act as intermediaries between cryptocurrency buyers and sellers and charge a commission fee for the same.
Decentralized exchanges, on the other hand, are peer-to-peer networks where buyers and sellers transact among themselves. These exchanges are preferred by traders who want privacy and anonymity while trading.
If you also want privacy while trading, Bisq may be the right exchange for you. It is a secure exchange with globally scattered servers to prevent system breaches. Intrigued yet? Want to learn more about Bisq? Then read on to find out about Bisq’s functioning, fee structure, and security features.
Bisq Exchange Overview
Bisq is a decentralized cryptocurrency exchange that launches its Alpha-version in 2014. However, it is not a company per se. Rather Bisq is free software released under version 3 of the GNU Affero General Public License. It is run as a Decentralized Autonomous Organization(DAO) and there is no particular company governing it.
Bisq is not a website like most other exchanges but a desktop application where traders can directly buy or sell cryptocurrencies without the interference of any intermediary. It is a fully peer-to-peer network that has no central servers and hence, no single point of failure. Bisq DAO’s native token is known as BSQ and its value is determined by the market.
How does Bisq Exchange Work?
Bisq is not an exchange that is hosted on the web. It is not even a company but rather it is software that you need to download and install on your computer. Unlike centralized exchanges, you don’t need to create an account and then wait for your KYC to be verified. All you need is some BTC and a crypto wallet and you are good to go.
Therefore, the first step for trading on Bisq would be installing the application on your desktop. Then you need to connect your wallet(you can also use the Bisq Wallet) and encrypt it for added protection. Note down your seed phrases and keep them in a secure location. You would lose access to your funds forever if you lose your seed phrases.
While you don’t need to transfer any funds to Bisq, you do need to select a payment method. Bisq supports a number of payment methods such as domestic wire transfers and ACH. After that, you can make an offer or take an existing one.
The buyer and seller both need to give security deposits which would be refunded after the transaction is settled.
Bisq Exchange Pros
Privacy and Anonymity
Bisq is a completely decentralized exchange that relies on a peer-to-peer network to complete trades. There are no intermediaries and buyers and sellers directly interact with each other. Bisq does not ask for any identifying information and hence, users can maintain their privacy and anonymity while trading.
No Geographical Restrictions
Anyone anywhere with a computer can use Bisq. This is a welcome change considering that a lot of exchanges are restricted in one place or the other due to regulatory reasons. Bisq is one exchange that people from all US states can use.
Instant Trading
Bisq is easily accessible and you can immediately begin trading on it with your crypto wallet. You don’t have to submit your private information and then wait for your KYC to be verified.
Control over Funds
When you use Bisq, you retain control over your crypto assets and private keys. You don’t deposit your funds into the exchange and thus, the chances of loss due to a system breach are minimal. However, this also means you are responsible for the security of your private keys.
Security
Since Bisq is decentralized, its servers are scattered globally and are not located in a central location. This makes hacking the system a difficult task. Plus, there is no risk of personal information or crypto assets being compromised because they are not stored on the platform in the first place.
Various Payment Options
You can use a variety of payment methods such as ACH, Alipay, Amazon eGift Card, and Domestic Wire Transfers to settle trades. However, note that Bisq does not integrate with any payment method these transfers are made out of its software.
Bisq Exchange Cons
No Regulation
Bisq’s decentralized nature can be an advantage as well as a disadvantage depending on your perspective. There is no regulation or verification system on the platform which increases the possibility of illegal activities such as money laundering and terror financing.
Mandatory Bitcoin Requirement
You cannot begin trading on Bisq without having some bitcoin with you. Hence, you have to go through the extra step of acquiring some BTC for trading on Bisq.
No Educational Resources
There are no educational resources on Bisq to help users navigate the platform or just learn about cryptocurrencies in general. Hence, a steep learning curve might be involved when you first start using Bisq.
Possibility of Fraud
Bisq requires no identifying information which protects users’ privacy but also leaves them vulnerable to fraud. Criminals can exploit the system to scam users. Plus, because Bisq is not regulated, its users are devoid of the protections a regulated exchange would be able to provide.
Does Not Support Fiat Currency
You cannot directly purchase cryptocurrency on Bisq with fiat currency or your debit or credit card. It only handles BTC and does not support fiat money. The fiat payments are settled outside the Bisq software.
No Customer Support
Bisq is a largely self-service platform. If you have any problem, the most you can do is peruse the FAQ section or try to seek help from the community at large on Telegram or other such social channels.
Bisq Exchange Fees
The fees on Bisq have to be paid either in BTC or its native token BSQ. Therefore, it is a good idea to get some BTC before trading on it. The BTC trading fee rate on Bisq is 0.12% maker fee and 0.88% taker fee.
In the case of BSQ, the trading fee rate is 0.06% maker fee and 0.44% taker fee. Bisq tends to promote the use of BSQ for transactions by offering nearly 50% discount for using it.
On Bisq, while the BTC fee rates tend to remain constant, BSQ rates are updated to account for BSQ rate fluctuations.
Bisq Exchange Security
Bisq is secure in the sense that it does not hold any crypto with itself. It is a Decentralized Autonomous Organization(DAO) and users do not deposit any crypto assets on it, unlike a centralized exchange. The users retain possession of their private keys and therefore, they do not lose their funds even if the system is hacked. However, this also means that there is no way to recover the assets if the private key is lost.
Since Bisq is a desktop application that you install, the onus is on you to secure your system. Encrypt your wallet, keep a strong password, and keep your private keys or seed words in a safe place.
Additionally, Bisq requires both sellers and buyers to put in a security deposit to complete the transaction. Trades are secured by locking the deposit and trade amounts in a multi-signature address. In case the trades go wrong, Bisq offers a three-tier dispute resolution process beginning with trader chat and mediation and arbitration being the second and third levels respectively.
One downside of no user verification on Bisq is that it is rife with the potential for cryptocurrency scams. Therefore, you have to be vigilant while trading on the exchange.
Customer Reviews
Bisq has an Excellent rating on Trustpilot with a score of 4.5 out of 5 based on 25 reviews. Customers find it to be an accessible platform without the hassle of KYC verification. They can just connect their wallet and start trading. Some also say that Bisq’s peer-to-peer network is closer to the spirit of cryptocurrency and Bitcoin than other exchanges.
Users like that there is no registration process on Bisq
Users praise the purely peer-to-peer nature of Bisq
Some users, though having faith in Bisq’s potential, also point out its flaws such as slow transaction speed and low trading volumes.
Users complain about Bisq’s website design and the slow transaction processing on it
Some reviewers dislike the lack of proper customer support on Bisq. The fact that it doesn’t support cryptocurrencies is also seen as a limitation. It has also been pointed out that Bisq does not have the best User Interface and there are a lot of bugs in it.
Users complain about the Bisq wallet and the lack of proper information about trading fees
Customers express disappointment with Bisq’s poor UI
Bisq Frequently Asked Questions
Is Bisq No KYC?
Yes, Bisq does not ask for any KYC information from its customers. It is a decentralized exchange where users directly transact with each other on a peer-to-peer network without any intermediary.
What is the Minimum Deposit for Bisq?
The minimum security deposit on Bisq is at least 15% of the trade amount with an absolute minimum of 0.001 BTC on the buyers’ side. Similarly, sellers need to have a deposit of 15% of the trade amount with an absolute minimum of 0.001 BTC.
What is the Withdrawal Fee for Bisq?
The withdrawal fee on Bisq from the platform to an external wallet is estimated to be around 0.0003 BTC which is below the industry average.
The Bottom Line
Bisq is as close as you can get to the core principles of cryptocurrency- decentralization, security, and privacy. It is a no-frills exchange that relies purely on a peer-to-peer network to facilitate cryptocurrency trading. If you want to trade without giving up any identifying information, Bisq is the way to go.
However, you might be disappointed if you’re hoping to learn something about cryptocurrencies on Bisq. It is a computer application and does not have any educational resources beyond a basic FAQ section. Plus, there have been complaints about lags and bugs in the app. Hence, using Bisq may involve a steep learning curve.
Beginners are better off sticking to a simpler exchange with extensive educational resources and robust customer service so that they can get help in case of trouble. If you have cryptocurrency trading experience and want to try a decentralized exchange, you can check out Bisq.