What is Bisq?
As mentioned in the title, the technical definition of Bisq is “A Decentralized Peer to Peer Crypto Exchange Platform”. Let me translate this into normal terms. Bisq is a service that allows people from all over the world to buy or sell cryptocurrency in a safe and fairly private way, without needing a single entity like a bank or big tech company.
Why would you want to use Bisq?
Many people wanting to acquire some cryptocurrency (by exchanging so-called fiat money, like USD and EUR, into crypto money, like Bitcoin) can use one of the many prominent (licensed and regulated) exchanges like Coinbase, Binance, etc. Many countries also have local licensed exchanges, operating under government oversight.
All these exchanges must follow certain laws. These laws, often referred to as KYC (Know Your Customer) and AML (Anti Money Laundering), require the exchanges to perform proper due diligence on their customers. This results in customers having to send copies of their passports, utility bills, selfie photos, and sometimes even biometric data. Not everyone feels comfortable providing all this info online, to a company they don’t know, and not knowing what will happen with this data, how it is stored and secured, and in which ways it might be shared with third parties. The risk of their data landing into malicious hands is often heard. Looking back at various hacks and data leaks, it’s definitely a realistic concern.
Furthermore, there’s a rising government crackdown and scrutiny on these exchanges, resulting in them hopping from jurisdiction to jurisdiction. The explanation the companies give is they don’t have a headquarter, because Bitcoin also doesn’t have one. In my opinion, this reasoning makes no sense at all. Gold doesn’t have an HQ, though all businesses trading gold must be licensed and have a psychical HQ (preferably not a 10 m2 office located on the Cayman Islands, equipped with a single desk, chair and plant).
When you discover that these Cayman Islands, widely known for their ‘relaxed’ tax regime, are not too fond of Binance wanting to operate under their jurisdiction, you can conclude that other forces are at play here.
So whether you are a libertarian, value your privacy, are a web 3.0 pioneer or simply don’t have access to exchanges, Bisq might be an attractive alternative to get your hands on some crypto.
LocalBitcoins has been around for some time, but compared to Bisq it’s not decentralized, and it can be deterring to meet local strangers in a random parking lot to exchange your dollar bills into crypto.
How does Bisq work?
Without too many technical details, the platform uses TOR and a piece of software to form a network between all its users. Users are urged to keep the software running 24/7, making sure the network remains stable. So if you want to participate in the network, it’s best to install the software on a computer that’s always on and connected to the internet (A Windows VPS would be perfect for this).
Sellers can create offers in the system, where they can choose from various payment methods (cash, deposit, wire transfer, e-money transfer, etc.) and define their own markup percentage on top of the market value. Regular exchanges also use a certain markup, and will also charge a commission fee.
As a buyer, you can browse all offers placed by these sellers and simply select one that suits your needs (in terms of payment method, fiat currency, and markup percentage).
Bisq facilitates as an escrow service, requiring both parties to make an advance deposit, and will also help you in case a conflict might occur.
Want to know more?
Give some claps to motivate me to write a practical how-to-use Bisq guide. If you are tech savvy enough: