Bisq, which was previously known as Bitsquare is a decentralized, peer-to-peer cryptocurrency exchange. While they allow fiat currency transfers, we see them as a more idealistic competitor to services like bitcoin.de, than a mainstream tool for buying bitcoin, like Coinbase.
The company, security of funds
Bisq is not a company, but a “Decentralized Autonomous Organization” (DAO)”. The project was started in 2014, by Manfred Karrer, as a means of keeping the original spirit of Bitcoin alive, even through the exchanges on which it is traded.
The entire trading process at Bisq is not as simple as the one your are probably used to. Most exchanges operate on centralized servers. In essence all other the account balances are kept by the company and when you trade, let’s say Bitcoin, no transaction is made on the actual Bitcoin blockchain. The transfer only occurs in the company’s internal systems, which keep all of the coins and store the database, stating the amount of coins held in each account. While this allows the facilitation of fairly advanced trading software, some people don’t like the control which they give to the company running the exchange.
Bisq is a totally different project which, connects buyers and sellers of Bitcoin (and other assets). The trading service is running on blockchain technology, supported by the community. This has several implications, but most importantly hacks are basically impossible and your personal information is not accessible by the owners.
Additionally, the company (which isn’t actually a company) does not control your coins. When connecting to the network you can input several payment methods – your cryptocurrency wallets and/or bank account and/or e-weallet (more on the payment methods below). It is key to note that this information is only shared with your direct trading counterparties.
When trading at Bisq, you can either place an order on the trading book or “hit’ one which is placed by another user. After your are matched, the crypto-currencies involved are sent to a multisignature address, form which they will find their ways to the respective wallets. An arbitration mechanism is in place, in case a conflict occurs and a security deposit is collected from both sides (the latter is refunded, after both sides confirm the transfer).
On the other hand, every change on the decentralized Bisq network has to be recorded on its own blockchain. This makes the project very inconvenient for active traders, as a small fee is even charged when placing an order (even before it’s filled).
While being a lot more complicated than traditional exchanges, like Kraken, Bisq is very highly praised by customers. The loyal fan-base may not be huge, but definitely appreciates the service provide by the platform.
Trading instruments (cryptocurrencies)
Currently there are 127 cryptocurrencies trading at Bisq. That being said, the trading volume on most of them is not impressive.
Minimum initial deposit
There is no minimum deposit at Bisq, as the platform does not require deposits. That being said, there is a limitation on the maximum trading size, which is set at 1 BTC, a pretty high level for most people, especially given current prices. That being said, forex brokers (which we mostly cover) usually announce a pre-determined minimum, below which they will not open a real-money account. For example, FXCM requires $50.
Bisq does obviously not allow margin trading, as it is simply a method of connecting users. The leverage ratios available at most crypto-excanges rarely go beyond 1:20, as the space is very volatile. Even the forex brokers, which offer Bitcoin trading, like IG, do not provide high gearing.
The fees at Bisq are a complicated topic. If you don’t believe us, here is an actual quote from their FAQ section:
Trading fees are based on trade amount and distance to market price. Min. fee (MinFee) = 0.0002 BTC, default fee (DefFee) = 0.002 BTC, amount factor (AF) = 1/BTC, market price factor (MF) = square root of percent value (e.g. 1% -> 1, 9% -> 3, 0.01% -> 0.1). Trading fee = max(MinFee, DefFee * amount * AF * MF). E.g. 0.002 BTC for 1 BTC trade at 1% market price distance.
To put it more simply if you buy Bitcoin at a market-relevant price, you will pay something under 0.002 BTC, depending on the size of your order. As a comparison the forex brokers, which allow crypto-trading almost always include the entire trading costs in the spread. This is only one of the many differences between the two services. For a full list, check out this post.
The trading platform available at Bisq is not that sophisticated. That being said, the platform is a stand alone desktop application, which isn’t burdensome for the hardware.
This is simply not impressive, by any means. Other than the basic charting, you can also see the relatively low volume on Bisq.
While the platform as a whole is fairly self-explanatory, it isn’t something which will impress seasoned traders, who are used to solutions, like MetaTrader4(MT4).
Methods of payment
The payment methods supported by Bisq include a variety of Bank Transfers, Zele (ClearXchange), OK Pay, Perfect Money, AliPay and even US Postal Money Orders.
Bisq (formerly known as BitSquare) is a decentralized, peer-to-peer crypto-currency exchange. While this sounds good from the idealistic perspective of not allowing potentially dishonest exchanges to access your Bitcoin, it carries a few flaws with it. The speed of transactions is very slow, when compared to the more mainstream platforms, which can be easily explained by the way Bisq works. In tern, this leads to relatively low volumes and even order-placement activity. One can argue this is simply a product aimed at people willing to exchange cash for cryptocurrencies (without trading actively). The counter argument for that will be, that in order to realize the full benefits of this project, one would have to already be familiar with the world of crypto. While we like the idea behind this exchange, we would like to see what improvements can be made to it, before recommending it.
Bisq Review Conclusion
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