Cryptocurrency, especially Bitcoin, was developed as an alternate method of payment. They were developed with privacy, security, and decentralization as their core guiding principles. But over the years, the popularity of cryptocurrencies as a speculative instrument and the rise of centralized cryptocurrency exchanges has somewhat diluted those principles.
Bisq stands out here as an exchange that has remained true to the values of cryptocurrencies. It is an exchange that does not store any data about you and simply provides a platform where buyers and sellers can trade in cryptocurrencies without any third-party interference.
However, if you find the idea of using Bisq intimidating, this guide might be for you. It will help you learn more about Bisq and give you a general idea of what to expect when you trade on it.
What is Bisq?
Bisq is a decentralized cryptocurrency exchange. But it is not a platform hosted on the web. Instead, it is a free software launched under Version 3 of the GNU Affero General Public License. The Alpha version of the software was launched in 2014. It is a fully decentralized peer-to-peer network where cryptocurrency buyers and sellers directly trade with each other.
Bisq’s servers are scattered globally which reduces the possibility of a central system failure. It also has a native token called BSQ whose value is determined by the market. You can get a nearly 50% discount on the transaction fee on Bisq by paying with BSQ.
Why Use Bisq?
Now, let us look at some features that give Bisq an edge over other cryptocurrency exchanges.
Anonymity
Bisq is perfect for crypto traders who value privacy and anonymity above all else. You don’t even need to register your email address on it. Your identity is, therefore, completely protected while using Bisq.
No Geographical Restrictions
There are numerous exchanges that are blocked in one country or the other. Binance’s global platform, for example, is not available in the USA. Navigating which exchanges are available where can be a headache. With Bisq, there is no such issue. Anyone anywhere can use Bisq with a computer.
Security
Bisq is a secure exchange in the sense that it does not store users’ information and funds in the first place. Its servers have no central location and are scattered globally. This keeps it immune to the risks of central server failure.
User Control over Assets
Bisq users don’t have to hand over their crypto assets or private keys to a third-party like on centralized exchanges. They maintain control over their assets. This lowers the possibility of a loss of funds due to malicious attacks.
Supports Multiple Payment Options
While Bisq does not integrate any payment methods with the software itself, it does support multiple options for settling transactions such as ACH, Amazon eGift Card and Domestic Wire Transfer(in the USA) as well as NEFT, RTGS and UPI(in India).
How to Get Started with Bisq
Bisq is not a centralized platform but an open-source computer application that you have to download to trade with other people who also have Bisq installed on their computers. You don’t need to submit any identifying information either and can start trading in minutes.
Step 1: Download the Bisq application from its website and install it on your computer. When you open the application for the first time, it will connect to the Tor network and sync with the peer-to-peer network.
Step 2: Agree to the Bisq terms and conditions
Step 3: You will see a list of active offers but won’t be able to take any of them unless you add a payment method. For this, you need to go to the Account section on the top and click on Add New Account.
Step 4: Then select your payment method from the dropdown list. Remember that your payment method determines what trades you can take and how fast they are settled.
Step 5: Enter your full name as registered with your payment account and also fill in your registered email address or phone number. Add the currency and edit the account name if you want to though it is not mandatory.
Step 6: Review the information you have entered to check if it is correct as you won’t be able to edit the account information later. After that, click on Save New Account.
Step 7: When you go back to the Buy BTC screen, trade offers compatible with your payment method will be enabled. You can now deposit BTC in your Bisq wallet for the security deposit and to pay the trading and mining fees.
Step 8: To deposit some BTC in your wallet, go to the Funds section and click on the Receive Funds tab. Copy the given address and paste it to the destination from where you will be transferring funds. You can also scan the given QR code for this.
Note: It is not compulsory to deposit BTC in the Bisq wallet. This is only recommended so that you have the security deposit and fee readily available for trades. Otherwise, you can also manually transfer the deposit and fees when making offers.
How to Complete Trades on Bisq
You can directly start trading on Bisq after completing the setup.
Step 1: On the home screen, click on the Take Offer button for the trade you want to take. When you do so, Bisq will create a special wallet to hold your security deposit and trading fee.Â
Step 2: Your taker fee will be paid from this wallet and then, your security deposit along with the seller’s security deposit and the traded BTC will be transferred to a multi-sig escrow transaction.
Step 3: Now, you have to fund your trade. Bisq will tell you the amount of funds needed, the trade wallet address and the wallet balance. If you have sufficient balance in your Bisq wallet, click on Transfer Funds from Bisq Wallet. If not, send the required amount to the specified trade wallet address.
Step 4: If you want, you can choose whether to pay the trading fee with BTC or BSQ by enabling the toggle button for whichever one you choose.
Step 5: Click on the Review: Take Offer to Buy Bitcoin button and go over the details of the trade once. If you are satisfied, click Confirm to go ahead.
Step 6: After the trade transactions are confirmed on the Bitcoin network, you will be able to see the seller’s payment details. Now, you can pay the seller as per the agreed terms and payment options.
Step 7: Next, click on the Payment Started button. This will let Bisq know that you have sent the payment and the seller will also be informed about the same.
Step 8: The seller will mark the payment as received when they get it. Bisq will then release your bitcoins and security deposit. You can then either keep them in the Bisq wallet or transfer them to an external wallet.
How to Secure Your Bisq Wallet
You need to secure your wallet to protect your funds. This makes sure that anyone who gets access to your computer is not able to easily take your bitcoin.
Step 1: In the Bisq app, go to the Account section and click on Wallet Password. Now, set a solid password to encrypt your wallet. It is recommended to use a password that has a mixture of uppercase and lowercase letters, numbers and special characters.
Step 2: Next, in the Account section, click on Wallet Seed. Write down the seed words and the wallet date shown on the screen. It is better to note the seed words on a piece of paper to eliminate the possibility of a hacker obtaining them.
Step 3: Keep the seed words in a secure place as you would not be able to access your wallet and funds if you lose them.Â
Bisq FAQs
Does Bisq Require ID Verification?
No, Bisq does not require any form of ID verification. Privacy is one of its core features and buyers and sellers directly transact on it without any intermediaries.
What is the Minimum Security Deposit for Bisq?
On Bisq, buyers and sellers have to keep 15% of the trade amount with an absolute minimum of 0.001 BTC as the security deposit. This security deposit is refunded after the transaction has been settled.
Does Bisq have Fees?
Yes, Bisq does charge a trading fee which has to be paid either in BTC or its native BSQ token. For BTC, this comes out to be a maker fee of 0.12% and a taker fee of 0.88%. In the case of BSQ, the maker fee is 0.06% and the taker fee is 0.44%.
Conclusion
Bisq is one cryptocurrency exchange that is decentralized, private and secure. Here, you don’t need to worry about giving your personal information to some corporation or losing your funds due to a breach in the exchange’s system. On Bisq, all you have to do is install an application and complete a basic setup.
New users may find Bisq a bit confusing to navigate at first especially since it does not have many educational resources to help them. This guide will help you to become familiar with Bisq and use it in a safe and secure manner.
