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Bisq Review 2023: Benefits, Security & Fees
Luis Clark
- URL: https://bisq.network
- Headquarter: Barcelona, Spain
- Year Founded: 2014
- Platform App: Desktop
- No. of Cryptos: Bitcoin and others dependent on users
- Fiats Available: USD, GBP, EUR, YEN, CAD, AUD, BRL, and more
- Withdraw Method: Crypto wallet, bank transfer, P2P
- Payment Method: Advanced Cash, Alipay, Cash Deposit, Chase QuickPay, Face-to-face, HalCash, Interac e-Transfer, Japan Zengin Furikomi, MoneyBeam, MoneyGram, National Bank Transfer, Perfect Money, Popmoney, PromptPay, Revolut, SEPA, Zelle, and more
- KYC Verification: No
- Native Token: Yes
Bisq Review: Our Opinion
The Bisq exchange isn’t like a traditional brokerage platform, it is a decentralized platform. This brings the benefits of security and control for advanced users. However, just like most decentralized exchanges (DEXs), beginners will find the platform complex to use in making trades.
An Overview of Bisq
The Bisq exchange is a decentralized exchange that is best understood in 2 ways. First, it is a cross-platform desktop application that enables crypto investors to buy and sell Bitcoin and other cryptocurrencies for fiat currencies or other digital assets.
Second, the Bisq exchange is a trading protocol that allows users to exchange their crypto assets directly with each other. This cuts out the need for third-party exchange services. The Bisq network is completely peer-to-peer and does not require centrally controlled servers.
In addition, Bisq isn’t a company, rather it is free software released under version 3 of the GNU Affero General Public License. The project built itself as a decentralized autonomous organization.
In comparison to other decentralized exchanges, Bisq distinguishes itself in how it manages the payments of fiat currencies. It does not directly integrate with fiat currency payment systems or banks. Rather, the Bisq trading protocol simply facilitates the process of a buyer and seller working together to settle payments of fiat currencies outside the software.
The Bisq exchange is also non-custodial, so users have complete control of fiat and crypto funds and it never touches trader funds. Funds are held in user-controlled accounts and wallets. And all security deposits are carried out via multi-signature addresses.
The exchange offers a native token called BSQ, which is a native token built as a Bitcoin-colored coin.
Pros
- It supports various payment methods
- It is a non-custodial platform
- It has a native token
- No KYC verification required
- Users can receive notifications from the desktop via the Bisq mobile app.
- Bisq withdrawal fees for BTC withdrawals are low
Cons
- It does not support the staking of digital currencies to earn interest
- Not suitable for beginners
Bisq Review: Unique Features
Bisq Wallet
The Bisq wallet is a software Bitcoin wallet that is based on BIP-44. It is designed for the storage of BSQ tokens as the tokens cannot be stored in any other wallet. Unlike other wallets, the Bisq wallet can interact with Bisq trading protocol transactions. This transaction happens on-chain on the Bitcoin blockchain.
The wallet has a “Funds” tab which displays 3 different balances: available balance, reserved balance and locked balance.
The available balance is the normal balance that the user can use to send BTC to other wallet addresses. The reserved balance is under the full control of the user but not spendable by the wallet. Finally, the locked balance is out of the control of the user. The locked balance can be funds that were locked in a trade because it is up for sale or as a security deposit.
Bisq users with an existing wallet directory can get a fresh wallet and transfer their BSQ balance at will. To create a new wallet you will, first of all, need to set aside the existing wallet directory by renaming it.
If a user wishes to rename their wallet directory, they must ensure that Bisq is not running when the change is being made. They must also have some BTC and BSQ in the existing wallet. The BTC will be needed to pay the mining fees.
BSQ Token
BSQ is a colored coin network on the Bitcoin blockchain. Colored coins are Bitcoins with a mark on them specifying their exact use. Simply put, a BSQ token is a few satoshis with some extra properties which identify it as BSQ in the Bisq software.
Outside the Bisq platform, a BSQ token looks like regular satoshis but on the Bisq exchange, the Satoshi takes on the market value of the BSQ token. The value of the BSQ token in the Bisq ecosystem is determined by the market via Bisq trades as stakeholders buy and sell the token to perform their different functions in the DAO.
As already stated BSQ only has value on Bisq. This means that BSQ token trading can only happen on Bisq.
BSQ Token holders have the power to participate in the Bisq DAO and participate in various aspects of Bisq governance.
BSQ is not associated with any kind of capital-raising initiative or Initial Coin Offering, it is simply a tool to decentralize the governance of the Bisq decentralized exchange.
A major question asked by most people is concerning the exact origin of the BSQ token. As you already know BSQ token is colored Bitcoin. Whenever a Bisq contributor in the DAO makes a compensation request, the contributor must include a tiny amount of Bitcoin to be colored as BSQ.
That means if the contributor requested 500 BSQ, they will need to include 100 X 500 which is 50,000 Satoshis in their compensation request. If the request is approved, the Satoshis are colored. Once this is done, they will be recognized as 500 BSQ tokens on the Bisq exchange.
After the BSQ tokens have been created, a trader who wants to lower trading fees can buy the BSQ tokens from the contributor for BTC. When the trader uses BSQ to pay trading fees the BSQ tokens will be decolored or burned and removed from circulation.
This method of creating and burning BSQ creates a monetary policy controlled by Bisq exchange traders and stakeholders, this eliminates the need for a central authority responsible for the collection and distribution of revenue. This makes it different from centralized exchanges and strengthens the decentralized nature of the Bisq decentralized exchange because no single individual is controlling any aspect of the distribution of the token.
Bisq DAO
The Bisq Decentralized Autonomous Organization (DAO) is the decentralized governance mechanism built in Bitcoin for the Bisq decentralized exchange. Since Bisq is a decentralized exchange, it cannot be controlled by a central authority like a centralized exchange. Most decentralized exchanges like Bisq are organized by a DAO.
The DAO makes the Bisq decentralized exchange resistant to censorship. It also handles Bisq’s funding and strategy making. It is responsible for the growth of the network and also ensures the security of the exchange against attacks.
The Bisq DAO is responsible for financing the project and determining strategy. Unlike centralized exchanges, strategy is determined collectively via voting. This voting is done on the Bisq platform and recorded on the Bitcoin network.
Bisq Review: Cryptocurrencies Available on Bisq
Like most decentralized exchanges, there is no exact number or list of supported cryptocurrencies. The currencies available for trade is dependent on what Bisq traders put on the market.
Bisq users can, however, trade Bitcoins for altcoins such as USD Coin, Six Eleven, Ether Classic, Dogecoin, Monero, Smart Bitcoin, Zcash, Ergo, Grin, Litecoin, Dai, BSQ, Ethereum, etc. Every Bisq trade involves buying or selling Bitcoin. This means that one side of every Bisq trade must involve buying or selling of Bitcoins.
Bisq Review: Bisq Trading Fees
Bisq trading fees are charged to fund the Bisq DAO when taking or making an offer. Fees can be paid in BTC or BSQ. To get a discount the Bisq decentralized exchange encourages traders to use BSQ, its native token, to pay their trade fee, by offering a discount of 50%.
That said, while the discount fluctuates as the BSQ/BTC rate changes, the exchange maintains the 50% discount target by updating its fees every cycle as needed.
Bisq trading fees are charged per 1 BTC using the maker and taker model as follows:
- Maker: 0.0012 BTC or 14.21 BSQ
- Taker: 0.0088 BTC or 104.24 BSQ
The total BTC trading fee is a flat 1% charge at 0.12% for the maker and 0.88% for the taker. Also, the absolute minimum mining fee used to cut out dust is 0.00005 BTC.
If you decide to pay the Bisq trading fees using its native token, BSQ, the decentralized exchange charges 0.5% in total at 0.06% for the maker and 0.44% for the taker. The absolute minimum fee to avoid dust here is 0.03 BSQ.
It’s important to state that trading fees and absolute minimums on the platform are DAO parameters that must be proposed, reviewed, and approved via DAO voting. BSQ rates are typically adjusted per cycle to account for BSQ fluctuation but by fee, rates are usually constant.
You will also choose how to pay your fees when making or taking an offer on the Bisq exchange as the platform will show you BSQ and BTC amounts.
Bisq also charges withdrawal fees. Bisq withdrawal fees are one-third of the mining fee charged for trading.
Bisq Review: Payment Methods
Bisq offers several payment methods that allow you to buy and sell cryptocurrencies on the Bisq exchange. However, as iss the case with most decentralized exchanges, the Bisq software does not integrate with any offered payment method.
That said, more than 20 payment methods are supported to purchase digital assets with fiat currency. Each of these payment methods varies in fees charged, privacy, transaction size, chargeback risk, and regional availability.
Here are the supported payment methods and the details that accompany them:
- Advanced Cash: This payment option is not available in the USA but other global users can use it.
- Alipay: This payment option is available in China and has a per-trade limit of 1 BTC.
- Cash Deposit: This option isn’t region specific. However, some banks do not accept cash deposits from non-users.
- Chase QuickPay: This option is available in the United States.
- Faster Payments Service: The FPS is available for Bisq exchange users in the United Kingdom.
Other supported payment methods include HalCash, Interfac e-Transfer, Japan Zengin Furikomi, MoneyBeam (N26), MoneyGram, National Bank Transfer, Perfect Money, Popmoney, PromptPay, SEPA, Revolut, Swish, Transfer with Same Bank, Transfer with specific Bank, US Postal Money Order, WeChat Pay, Uphold, Zelle, and Western Union.
According to the exchange, Bisq does not support PayPal, Cash App, and Venmo because chargebacks for payments are very easy on those services.
Users can also send suggestions for new payment methods on Keybase, especially options that open new markets.
Bisq Review: Bisq Security
Like most decentralized exchanges, Bisq is not a corporation and has no governing body, and is thus not subject to any external regulations like centralized exchanges.
The Bisq decentralized exchange implements three primary mechanisms to achieve Bisq security: First, all Bitcoins traded in Bisq are secured in a 2-of-2 Multisignature wallet address.
Also, Bisq requires both traders in a transaction to pay security deposits before the transaction is executed. After the trade, security deposits are refunded to the traders, the security deposit is required to ensure that both parties pay their due and to also discourage dishonest traders from cheating the other party in the trade.
Finally, Bisq uses a three-tier mechanism to handle trade disputes. This includes end-to-end encrypted trader chat, mediation, and arbitration.
Trading Bitcoin with fiat currency on Bisq is often subject to chargeback risks that can result in fiat currency transactions being reversed. To avoid this problem, Bisq only supports payment methods that make chargeback difficult. This is why Bisq does not support credit card and PayPal payments.
To also discourage dishonest traders and any form of fraudulent activity, Bisq implements a signing mechanism that imposes a buy limit of 0.01 BTC until a buyer’s integrity is verified. Note that this does not include the identity verification of the trader.
Since Bisq is a decentralized exchange, none of the information is stored in a central server. Since there is no central server as is the case with centralized exchanges, there is no central point to hack. Also, Bisq users’ information is stored locally on the user’s machine and that of the trading partner. If there is a dispute, the information may also be accessible to the arbitrator and mediator.
Bisq users a peer-to-peer network that provides a high degree of anonymity. No identity verification is required to use the platform. All data exchange between users on the peer-to-peer network is encrypted and signed.
Like most decentralized exchanges, users’ personal information and funds cannot be stolen through any fraudulent activity. The security of the user’s assets is dependent on the safety measures implemented by the user.
Despite the anonymity of traders on the platform, Bisq claims that traders have not experienced any issues with money laundering on the platform.
Staking Rewards
Unlike other centralized exchanges and decentralized exchanges, the Bisq exchange does not allow you to stake digital currencies for interest or to join liquidity pools to receive trading fees.
Bisq Review: Opening a Bisq Exchange Account
Bisq is a decentralized trading platform so you won’t need to create a Bisq account to start trading like you would on a centralized exchange.
To get started, go to the Bisq download page and download the software and install it on your desktop. Unlike most decentralized exchanges and centralized exchanges, Bisq does not run on a centralized server for taking or making offers, so it’s impossible to trade on a website.
After the installer is done, open the software. You’ll need to wait a bit for the software to connect to the Tor network and sync with the Bisq peer-to-peer trading network.
Once that’s done, you’ll see a screen with half of it green and the other half red.
That’s all! You’ve successfully created a Bisq profile and you can start trading.
Supported Countries
Bisq is open-source software and it allows users to buy and sell bitcoin worldwide. It is available in various countries including the United States of America, the UK, Europe, Australia, Canada, China, Spain, Japan, Thailand, etc.
Trading Experience
The trading experience on the Bisq decentralized crypto exchange is quite complex and is suitable primarily for advanced users. Beginners will find it difficult to navigate.
To buy a cryptocurrency using the fiat currencies view you’ll need to select a supported fiat currency payment method. If you don’t find a supported payment method then you can create a new offer to purchase BTC with USD.
In general, the process is much more complex than buying crypto on centralized exchanges such as Coinbase.
Bisq Customer Support
Bisq offers customer support via various channels. The primary customer support channel of the platform is the Matrix bisq.chat group. Users can ask their questions in the group chat and other Bisq community members will help to answer them.
Asides from Bisq community members, Bisq also has support agents that can also provide customer support on the channel. Bisq users can see when support agents are scheduled to be online by checking the support coverage calendar.
Bisq also provides customer support via the Bisq forum, Telegram, Bisq dedicated page on Reddit, and Github issues. It also has lots of helpful resources in the FAQ section and Bisq wiki.
Bisq also offers mediation. This is a tool that is used to resolve a dispute between traders. If a trade period is over and the trade has not been completed, mediation will automatically open. It can also be opened manually by any of the parties in a trade.
Customer Satisfaction
Bisq reviews on third-party review platforms show that a lot of customers are content with trading on the platform. Many customers also attest to good quality customer support from the support team and the community.
Does Bisq Exchange Offer Education?
No, Bisq does not offer a crypto education but it does have a doc for navigating its platform.
Is Bisq Exchange Right for You?
Bisq is best for traditional crypto enthusiasts who support the ideology of a decentralized exchange. However, Bisq isn’t the best fit for beginner cryptocurrency investors.
Final Thoughts
Bisq is one of the leading decentralized exchanges. However, the Bisq exchange is best for advanced users as beginners will find the exchange very hard to use.
To gain a clearer picture of Crypto Decentralized Exchanges and to explore other possibilities, we recommend taking a look at our Best Decentralized Exchanges.
FAQ
Most frequent questions and answers
Bisq’s decentralized nature makes the platform considerably safe as you won’t need to go through third-party systems to execute trades like you would with other exchanges that are centralized.
You must make a minimum security deposit of 0.006 BTC. The security deposit applies to both sellers and buyers.
We always try to provide the most accurate information available, and make sure our team follow through.
If you want to know more about our Crypto Exchanges Review Methodology follow the link below
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