How to

How to use Bisq, a decentralized exchange

Bisq is a platform that aims to change the traditional concept of bitcoin exchanges. The reason is that when we trade cryptocurrencies, we mostly use centralized services like Localbitcoins or Paxful. These services usually store data on their servers, for example IP addresses, personal data, location, among others. The problem is that, if the security systems of the said servers are breached, it would completely threaten the privacy of users.

What solution does Bisq offer for this problem?

Bisq works in a decentralized network format, where each of the connected users would be an independent network node. In addition to this, and to further guarantee privacy, connections to the platform are made through TOR network encryption. Therefore, it can be said that, in terms of privacy, we will not have any problems.

In addition, when opening a transaction, there is no way to maintain a line of communication directly with another user. This is because there is no type of chat where we can be scammed, leading to potential fraud.

But how will the other user know where to deposit? If, for example, we make an exchange in Bisq via bank deposit, prior to the opening of said offer, First we need to register the details of the account to which the funds will be received. After that, this information will be sent to the customer to complete the transaction. This will be the only information the user will see about us. We will be able to see notifications about whether the payment has been made, the current status of the transaction, among other aspects related to the payment status.

Who is in charge of stock exchange protection?

You may be wondering, if the platform is completely decentralized, who will settle disputes between users? In those cases, referees come into play. These are users who have the power to review disputes. Nobody elects them, because, before they become judges, must deposit a large sum of BSQ tokens as collateralconsidering that in the case of partial decision-making according to one of the parties, it may be subject to review by other arbitrators and lose the deposit.

Advantages of using Bisq

  • Privacy: guaranteed thanks to the decentralized network and the TOR network.
  • Security in our funds: every bitcoin to be exchanged is deposited into a multi-signature account. Once both parties reach a final agreement, the funds are released.
  • Simplicity: very easy to use interface.

Download and install Bisq

This platform works by installing a single file. Therefore, it will not be necessary to use any kind of account or registration, we will only have to download the Bisq application, which will be the means with which we will connect to the network. We can find this file in the Bisq official website.

Source: Bisq.

The installer will download automatically after we have selected our operating system. After that, we execute the file we just downloaded, wait for the installation to finish and the application will start immediately.

Source: Bisq.

What we see in the previous image will be the preamble to deploy the software. Since this is the first time it has been run on our computer, the terms and conditions will be displayed.

If we read some of these policies, we see that it is mentioned that the price, managed by the platform, is set by an average between: Coinmarketcap, Poloniex and the current price of bitcoin. Each user is responsible for the risks arising from the use of payment methods involving banking entities.

Source: Bisq.

The next step is to wait for the application to connect to the network. This connection is will be done via the TOR network, which will hide the source of the IP address we use. This is why the process can be slow and everything will depend on the internet speed we have.

Bisq order book. Source: Bisq.

When everything is ready, we will see it for the first time: the order book for the BTC/USD pair, that is, the exchange between Bitcoin and US dollars. But we won’t change anything yet, first we need to support the wallets we will use within the platform.

Support our Bisq portfolio

Before researching or making any sales or purchases, we will support a bitcoin wallet that we will use within the platform. We can do this through 12 recovery words, since this wallet is generated on our computer, this backup will not be stored on any special server, so it is up to each user to ensure the safety of these words, which are the only means of accessing funds within Bisq.

On the other hand, the recovery seed, as it is also called and the secret key that gives access to bitcoin funds, will be found by going to the section Account. We will find this option in the upper right corner. Within this option we will select the option on the left menu seed of purse.

The seeds of our wallet’s recovery. Source: Bisq.

Warning: The seed we will back up below will not back up the entire session within the application.. By this I mean that transactions, open exchanges, created accounts will not be supported from this seed, but will only serve as a means to back up BTC funds within the platform.

As you can see in the red oval, the 12 accompanying words have a specific date. Both the words and the date must be protected in a safe place, preferably written down on paper or offline. We must remember that this is the only way to access our private keys.

At the bottom we will have a box in which, in case of restoration, we will put the 12 recovery words along with the date.

Make a backup copy

Although, as I mentioned before, the recovery phrase does not guarantee a complete backup of the application, how do you make a backup? In the left menu we will see the last option Backup.

Source: Bisq.

In this section we can generate a new backup and restore the information.

First of all, we choose the location where we will store it. We choose the option Select a backup location. We select the destination folder and click on Make a copy nowthis will create a file inside the selected folder.

On the other hand, if we want to return, we have to choose Open the directory. You might get a little confused here, but it’s easy to fix. When you select this option, you will see a folder with files, you need to replace those files with the ones generated in your backup. You just copy, replace and that’s it.

Finally, and as a final recommendation, it is suggested that backups be made periodically and saved to external storage devices.

Research Bisq

With our account secured, it’s time to explore the platform.

Source: Bisq.

What we see in the previous picture is a section Mercado, which we saw at the beginning. Here we will briefly look at the offers on the market, both for buying and selling.

To see the offers in more detail, we can select the corresponding ads from the top menu to buy or sell.

List of orders to buy BTC. Source: Bisq.

What we see is a list of offers available to buy bitcoins. The offers are filtered depending on what we as buyers are offering in exchange.

List of accounts where we can sell BTC. Source: Bisq.

The section we are in in the previous picture is that of BTC Sale. Its appearance changes very little compared to the purchase. We will deal with each of them later in order to buy or sell bitcoins.

Source: Bisq.

This is our portfolio section: from here we can manage all transactions or exchanges within our account. Remember that these transactions will only be made if we make a backup.

Source: Bisq.

The funds section is the equivalent of a portfolio. From here we will have available the necessary addresses for receiving and sending funds. On the other side, we will have a few extra cardsnext to the transactions section, where we will see reserved funds, which are bitcoins deposited as collateral, and blocked funds, which are those committed to an unfinished exchange.

Source: Bisq.

In this section we have specialized technical support for users. It must be taken into account that Bisq is a decentralized system and no company provides additional services for the exchange. Therefore, this section will only serve to report malfunctions related to the functionality of the platform.

In the central part, we will have the current average value of bitcoin expressed in the chosen fiat currency, as well as the balance of our portfolio.

Register accounts in Bisq

When we started talking in this tutorial, we mentioned that when selling bitcoins in Bisq, There is no way to maintain direct contact with another person. But then how will they know where to put us? Well, when opening an exchange order, the customer who buys from us will get our bill.

So what are bills?

These are the data required for payment. Likewise, we can record different types of accounts. Banking, for payments by transfer or deposit in fiduciary currency. Altcoin accounts, where we can exchange bitcoins for any other cryptocurrency supported in Bisq. And finally, we have accounts for payment processors like Uphold, Neteller, etc.

We will register deposit accounts from the section Account.

Accounts in national currency. Source: Bisq.

After entering, we will immediately find a section that allows you to register accounts for transfers in the national currency. In them we can set up transactions that require bank data (transfers, deposits) or payment processors that work with national currencies.

As a recommendation, We avoid, as far as possible, the use of bank transfers or any method that involves sharing data banking. With this measure, we avoid jeopardizing our privacy.

Bisq does not include payment processors where it is very easy to cancel a completed operation, such as Paypal, in order to avoid possible fraud.

Register a bank transfer account

The first account we will register will be bank transfers. We start by selecting the option at the bottom of the box Manage accountsand then Add a new account.

Source: Bisq.

Later we will see a box where we will choose a payment method for registration. In our particular case, we will choose National bank transfer. It should be noted that we have 2 more options very similar to the latter: labeled as transfers with certain banks y transfer with the same bank.

Source: Bisq.

What we see in the image above is the general form for transfers. Some information may be missing, as the method of transmission varies depending on the country in which we are located. This can be solved by adding additional data to text boxes that do not need to be filled.

On the other hand, with the country selected, the local currency will be set automatically, this can obviously be changed.

As for how we will fill out this form, we need to detail the following:

  • Name of owner: is the name of the owner of the account being deposited. It can be us or a third party, no problem. This information is mandatory.
  • Name of the bank: is the name of the banking institution. IT IS given es mandatory.
  • ID Bancario (BIC/SWIFT): This is an identifier used by banks to define the name of the institution, country, location and branch number. This information may not be requested in some countries.
  • Branch number: is the number that indicates the branch of the bank we will use. This information may not be requested in some countries
  • Account number: This number will be the identifier of the account being deposited. It must be taken into account that there are countries where we have to specify the type of account (savings, current, cash), we can put it in the same box.
  • Restrictions: This is the time we will have for the transaction to be confirmed, that is, until we receive the deposit. Otherwise, the operation will be closed.
  • Sol: the identifier that confirms the account we create.

Then there is the option to use a personalized name, obviously we will only see this in the lists of registered accounts.

When everything is finished, click on Save new accountwhere the following box will appear.

Source: Bisq.

As you can see in the picture, we will have a warning to avoid using such methods because they carry certain risks. We will also be able to see bitcoin transfer limits; these limits will depend on the age or seniority of the account we register.

We will conclude this part of the process with a selection I understand.

Source: Bisq.

After the account is saved, it can be seen in the account management list. To conclude, we can import or export registered orders.

Register an account for Altcoin exchanges

It is evident that through Bisq we can only buy or sell bitcoin, but these exchanges can be made not only with the help of fiat currencies, but also with altcoins.

Since we will not maintain communication with our other party in the transaction, we can set up an altcoin wallet that will be sent to another user so that he can make a deposit in bitcoin or another currency, just as happens in the case of bank deposits.

To start with, we’ll go back to the section again bill, but this time, in the side menu, we will choose Altcoin accounts.

Source: Bisq.

We will add the account via the button Add a new account.

Source: Bisq.

This will be the form to add a new altcoin account. We will only enter two things: the cryptocurrency to be exchanged and the address of said cryptocurrency. Later we will see the value limit allowed for each exchange, along with the maximum waiting time. At this point we will have the option of using the Salt function, which is an identifier that allows us to measure the age of an account.

Finally, we save the changes made and that’s it, the account is configured.

Source: Bisq.

Start exchanges in Bisq

Before starting, it should be noted that There are two ways to buy or sell in Bisq. First of all, we have the fastest, which is to search the list for an offer that matches what we are looking for. On the other hand, there is the possibility of publishing an offer and waiting for the user to accept our terms. The latter is the slowest option, although it improves the more attractive the offer.

There is a requirement for publications to be visible in the list. Since we use a decentralized network, the computer from which we run the Bisq application will work as a node, therefore, We need to keep the application open, this will allow our publications to be visible in the list. Once the transaction is opened, we can close the application without any problem.

Open purchase transactions through open bids

First, we need to open the exchange as quickly as possible, that is, ask for offers from people who sell BTC. Therefore, we will start this search by clicking on the menu Buy BTC.

Source: Bisq.

In this table you will find all open purchase orders. Some will be opaque, as we have not yet opened an account for this type of exchange.

Likewise, the table list can be filtered according to the type of currency being exchanged and the payment method to be used. In case we choose a cryptocurrency, we will not have the option of choosing a payment method for obvious reasons.

Each column represents a specific item. This, both in buying and selling:

  • Mercado: is the pair we will swap.
  • Precio: is the unit exchange value. For example, it is the value of a dash in bitcoins. Next to the price, we will see a percentage that indicates the increase or decrease of the price compared to the average price.
  • BTC (min-max): are the minimum and maximum quantities bitcoins which we can exchange with the user.
  • Quantity (min-max): These are the minimum and maximum amounts we can exchange, but in this column they are expressed in the currency to be exchanged for our bitcoins.
  • Method of payment– the type of payment offered or accepted by the user
  • Trader: an icon that identifies the user. From here we can set a flag to identify trusted users.

So what works now is to search for an offer and then open it by clicking a button Take Offer.

Source: Bisq.

This will be the first step that will allow you to open an offer. From here we will set the quantity to buy, taking into account the restrictions imposed by the bidder.

When selecting go to the next step, we will find two ads: the first will give us instructions about security deposits. They serve the purpose of the user paying the amount specified by the seller, so that we will be forced to perform the exchange operation correctly. Once the transaction is complete, the funds will be returned to us.

Source: Bisq.

The second ad, as you can see, shows us the total amount to pay along with the options we will have to complete this operation. We can cancel a payment directly from an internal Bisq wallet, as well as a transfer from an external wallet.

Source: Bisq.

In the end, we choose from which wallet we will pay and that’s it. A part of our portfolio of open offers will be opened to us immediately.

Source: Bisq.

What we see here is our open buy order, at the bottom are the details we need to know about the transaction. On the other hand, on the left side we will have the current status of the transaction. Therefore, the first thing will be to wait for our deposit to be confirmed in the Bitcoin blockchain, to finally proceed with the payment transfer of the BTC we buy.

Source: Bisq.

Now that our deposit has been confirmed, it’s time to transfer the payment. This option will be enabled after the seller deposits the escrow funds. On the other hand, in order to finalize the payment, at the bottom there will be the user’s details to which we will make a deposit, either in crypto or fiat currencies.

With the payment, we will mark the option Payment made. This will notify the other user that we have made a payment, so they can arrange for the funds to be released.

Source: Bisq.

With the funds freed up, it’s time to move the bitcoins we just bought. Here we will have two options available: we can move funds directly to our internal wallet or transfer them to an external wallet. All that remains is to choose the option that suits us.

Post a purchase offer

As I mentioned at the beginning, there are two ways to make a trade-in, and this time we’re going to post an offer to buy.

First we have to go to the section Buy BTC and click on the yellow button that will allow us to create the specified account.

Source: Bisq.

In this section, we’ll start by choosing an exchange account, which is equivalent to choosing the currency we want to buy bitcoin with. Later we will set the following values:

  • Amount of BTC to buy: is the exact amount we want to buy. This would be true if we set a minimum amount, such as a cap.
  • % below market price: is the percentage increase or decrease compared to the market price.
  • Amount to spend: is the total amount to be spent in the currency we choose.
  • Minimum BTC amount: is the minimum amount we are willing to trade.
  • Fixed price in BTC for 1: is the price in BTC for the currency of our choice.
  • Security deposit for BTC buyer: will be the minimum deposit required.

We will choose to continue Next step.

Source: Bisq.

We have to make a deposit that will guarantee a good exchange, as in the previous case. Obviously, once the purchase is complete, we will return this deposit to our wallet.

When we publish our offer, it will be available in the portfolio section. The next steps after the user accepts our offer will be the same as those we performed in the previous case. On the other hand, we must remember that, The publication will only be visible if we keep the application open and obviously connected Internet.

Start sales exchanges

As in the case of purchase, we will have two ways of selling, one quick which consists of searching for open offers, and the other which consists of independently opening a new offer. Let’s start with the first case.

Open sales transactions through open offers

We’ll start by going to the section BTC Sale in the top menu.

Source: Bisq.

In this window, we will have a table of offers that we can organize by currency and payment method. Each column represents the same items yes in case of purchaseso we’ll jump to the next step, where we open the transaction.

Source: Bisq.

From here we will follow the same previous steps:

  • Specify the quantity for sale.
  • Make a security deposit to ensure a transparent process.

After these steps are completed, it is our turn to transfer the funds to the wallet, which will ensure that neither party can move them individually. The next thing is to wait for the user to check the option that he has made a payment, which we need to confirm, after it is checked correctly, release the bitcoin.

Publish an offer for sale

To begin with, we need to go back to the section BTC Saleand select an option Create a new offer to sell BTC.

Source: Bisq.

There is virtually no variation in the publication of an offer to purchase. So, when we already have our order posted, we have to wait for someone to perform a swap operation with us, based on the quote we just posted.

Once the customer is done with the security deposit, it’s our turn to deposit the funds for the sale. The next step is to wait for the user to check the option that they have made a payment, and proceed with confirmation to our bank account or altcoin wallets that the deposit was successfully made.

With the funds already paid, it’s time to release them and complete the process.

Conclusions and opinions about Bisq

Bisq provides everything it has to offer, especially your privacy. From hiding our IP address to recommending that we do not use bank deposits, due to the risks involved, Bisq is very clear that privacy and security come first.

As for the user interface and how to use it, it can be a bit rough. This is because it uses slightly old design patterns, but does not make for a complicated interface.

We may have to make more than one attempt to connect, as it cannot properly synchronize network hops in the TOR configuration. It is also related to the speed of our internet.

This and more tutorials on our YouTube channel:

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