Bisq Review

When decentralized exchanges are discussed, they rarely include any mention of Bitcoin. They usually relate to Ethereum projects, or networks that run within other blockchain ecosystems. However, there has been an outlier in the industry that has existed since 2014, which will be covered extensively in my Bisq review.

This is a trading project that allows people to exchange BTC in a fully decentralized manner, akin to more well-known DEXs, such as Uniswap or the projects launched on Binance’s BNB chain ecosystem. However, fundamentally, under the hood, it operates in a slightly different way. The nature of this difference means that people often ask, "Is Bisq safe?" leading them to seek any sort of Bisq crypto review.

This is an important question to examine, especially considering how it functions differently from most other projects on the market. Therefore, reading Bisq reviews is necessary to do before jumping right in. Let's take a look at its peculiarities, its structure, and how these translate into its various pros and cons!

Verdict at a Glance: Bisq is a unique, decentralization-driven Bitcoin exchange. The platform functions unlike most other CEXs and DEXs in the industry, however - governed by a DAO, Bisq acts as a sort of marketplace / escrow service for anyone looking to trade BTC for fiat money or another digital asset. That being said, user Bisq network reviews tend to point out the complexity of the platform, as well as the fact that it's Bitcoin-exclusive.

What is Bisq?

Founded in 2014, originally under the name "Bitsquare", Bisq is a decentralized Peer-to-Peer exchange centered around Bitcoin. At first glance, this might seem unusual, as Bitcoin is often overlooked in DEX-related discourse. It is atypical for BTC to be an option. However, Bisq's underlying architecture is significantly different from others in the industry.

For starters, Bisq is decentralized but does not run on-chain. People often associate DEXs with being fully integrated within a blockchain network, with nearly all activity occurring through the addition of blocks and the signing of smart contracts. However, it is important to emphasize in this Bisq network review that it is decentralized in a unique way.

Bisq is globally distributed, with no central point of power or control, but due to Bitcoin's limitations as a blockchain, it cannot directly interact with the chain itself. Think of it as akin to how the torrenting community operates. Each node (or participant) in the network acts as both a server and a client, which can offer and request services. In the case of Bisq, this happens in the form of creating trading requests that get added to an order book.

Individuals can then request to fulfill orders, with the Bisq network connecting the two participants. In projects like Uniswap or PancakeSwap, orders are fulfilled by an automated market maker, which is a program that provides relatively accurate market prices and completes orders for clients through code and smart contracts. However, with Bisq, users are left to fulfill these orders independently.

When answering the question "What is Bisq?", it helps to see it as serving two primary functions: it matches buyers and sellers, and it provides measures to help facilitate secure transactions. It does this by offering the ability for Bitcoin to be held in escrow via the network, working as a type of security deposit. This feature is only available for Bitcoin, but despite this, Bisq is capable of working with any cryptocurrency or asset, so long as BTC is being bought or sold alongside it.

This means that it is even possible to buy and sell Bitcoin with fiat via Bisq. This is a refreshing change as it is something that is rarely seen in this industry. The fact that it embraces a type of decentralization that essentially predates the blockchain sector means that it can circumvent some of the limitations that we commonly associate with the concept.

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Bisq Review: PROS

Let's delve into the positives within this Bisq review, and examine what elements and aspects make it shine in the crypto industry.

Decentralized Bitcoin Exchanging

The most crucial feature to be covered in this Bisq review is its ability to facilitate decentralized Bitcoin trades. This is the essence of what makes Bisq stand out in this industry, as this is quite a rare sight. Novices in the crypto industry might not notice this, but veterans will be highly aware of how unusual it is to find Bitcoin included within the decentralized exchange sector.

As mentioned, this is possible because Bisq does not operate on-chain, but rather functions using older decentralized principles established within the world of Peer-to-Peer interactions. This means that, in reality, Bisq cannot execute trades in full, but can only introduce two parties to each other and give them the tools and opportunity to complete the trade themselves.

This can be considered within this Bisq review as a type of matchmaking. Unlike automated market makers who are programmed to manage the entire situation, Bisq is designed to be used only for part of the process. One element that perhaps makes it stand out more than an ordinary matchmaker is that it offers an escrow tool that provides added security within the trading process.

The way this works is that both buyers and sellers can agree to lock away a portion of BTC into Bisq’s network, which is used as a type of collateral that ensures the parties are genuine in their activities and truly want to engage in the trades in question. When the parties agree that the trade has been completed, they inform Bisq via the application, and the escrow, including the traded amount and security deposits, is released accordingly. This system helps to discourage dishonest behavior and protect users from fraud or deception during trades.

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Supports Fiat and Other Assets

A surprising benefit of Bisq's architecture is that it allows even fiat trades to take place. The network does not support fiat-to-fiat trades, but it does enable people to buy and sell Bitcoin with legal tender. The idea of fiat and decentralization being discussed together may seem outlandish, but the way Bisq functions means that these two concepts are relatively compatible. However, there are some significant limitations.

Usually, we view fiat as being impossible to work with in a decentralized exchange because it is an off-chain asset, meaning that it is not blockchain-compatible. But, because Bisq is also off-chain, it allows for this type of activity. That being said, the nature of using fiat works entirely through the matchmaking capabilities of the network. And so, it is decentralized, but only to a degree.

It can connect fiat buyers with Bitcoin sellers (or vice versa), but the act of actually transferring fiat to somebody else would likely be happening in a relatively centralized way. This is because Bisq does not place any restrictions on how exactly a person passes money to another, and so to exchange fiat, somebody would probably do so via a bank transfer or via an online and centralized network like PayPal or Skrill.

It is important to note in this Bisq review that the transferring part involves a huge amount of centralized financial tools, and that it is more so the matchmaking element that is decentralized. Depending on how intense and all-encompassing you want your decentralized activity to be, that will determine whether you view this as a positive or more of a neutral point. But it is worth mentioning, and due to the rarity of this existing in the market, I have considered it to be a sort of plus for the project.

Interestingly, the fact that Bisq is a type of skeleton network in this sense means that it can support other intangible assets. This could theoretically include unusual items such as loyalty points or programs from other companies, provided they can be transferred in a decent way. For instance, if you found a company that allowed the exchange of frequent flyer miles or even a supermarket that allowed you to pass your loyalty program points to somebody else, then these could be used on Bisq.

It sounds outlandish, and it probably would be complicated to do so, but it is technically possible, so long as there are willing buyers and sellers. At this point, it all comes down to whether you trust the parties involved to make the trades happen. Bisq has not been designed specifically for this, even if it is capable of doing so; therefore, dispute resolution might be challenging to navigate in this regard.

Fully Open Source

This Bisq review (or any Bisq network review, for that matter) would be incomplete without an explicit mention of its open-source nature. Unlike many other exchanges on the market, such as Binance or Coinbase, Bisq is fully open-source, meaning that its codebase is available for anybody to check and verify for themselves. It also means that the community surrounding Bisq can make amendments and keep it maintained.

Open-source activity and decentralization go hand in hand, as it is often considered illogical to have a company run a network that is meant to be globally distributed, as companies imply centralized control. That being said, many DEXs do have companies that handle their activity to some degree. Uniswap is a prime example of this, as it has a dedicated division that looks after it. This has, in fact, gotten it in trouble with the SEC, or at least caused the organization to raise its eyebrows in the sense that it has led them to question just what level of involvement the company has with it.

There is an ongoing discourse about how much centralization is too much when it comes to DEXs. However, Bisq has circumvented this by not having a company attached to it in any way. Rather, it functions with the help of a DAO, or a decentralized autonomous organization. This is a collection of individuals who have a vested interest in keeping Bisq functional and up and running.

The Bisq DAO allows for decision-making about the direction and policies of the Bisq platform. Anyone who holds BSQ tokens, the native token of the Bisq network, can vote on proposals. These proposals can include changes to the platform, the selection of arbitrators, and other matters.

The DAO also coordinates incentives to encourage participation in the network. Contributors who add value to Bisq—like developers, designers, and support staff—can be compensated for their work in BSQ tokens. People who use the platform also benefit from lower trading fees when they use these tokens.

In an indirect way, the DAO also helps to manage disputes and conflict resolution. Technically, arbitrators are not a part of the DAO, but their presence is a necessary part of the ecosystem, and they are distributed globally and work in a largely autonomous way. They are a necessary element within the ecosystem as they help to add a layer of security and protection in the chance that a trade goes wrong or somebody acts in an unjust way.

While they don't participate in the DAO's decision-making processes directly, their role in the ecosystem aligns with the principles of decentralization and autonomy that underpin the organization. Arbitrators themselves operate independently, and their role is to help facilitate the resolution of disputes in a fair and neutral manner.

However, they are also accountable to the DAO, and changes to the arbitration process, or decisions about who should act as arbitrators, can be proposed, discussed, and voted on within the community. So, while the arbitrators operate independently when resolving disputes, the structure and rules of their operation are influenced by the DAO.

Non-Custodial Service

Like most decentralized exchanges, Bisq is non-custodial by nature. This means that the network never holds onto your finances. You do not hand your BTC, or any other assets for that matter, over to Bisq for them to keep control of. However, there is an interesting caveat that is worth exploring which connects to this.

Despite its non-custodial structure, there is an escrow system in place, where buyers and sellers lock away a portion of their funds into the Bisq network. Technically, this could be considered a type of custodial activity, in the sense that some money is placed in a wallet that another party has partial control over, but it is important to note in this Bisq review that the project itself does not have this access.

Only the trading participants (and an arbitrator in case of dispute) can unlock the funds with their digital signatures. Neither the buyer nor the seller can move the funds without cooperation from the other party (or the arbitrator in case of a dispute), and Bisq itself doesn't have the power to move those funds independently.

This can be complicated to get your head around, as it suggests a level of semi-custodial guardianship, but this element exists more as a feature that helps ensure decent and fair transactions and trades, rather than a means for the network to look after your money. The wallet that is used for escrow is blockchain-based, and the keys never leave the hands of the parties involved.

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Bisq Review: CONS

To keep this Bisq review fair, I must highlight and delve into the negatives that are associated with it. While this exchange serves some very important purposes and acts as an outlier in the industry, it is not without some glaring flaws.

Limited Security Features

Bisq’s architecture is fairly uncluttered and bare-bones, which is necessary for it to facilitate such an interesting range of trades in a decentralized way. However, with that comes an inherent type of limitation in terms of security. While the network’s code is considered sound, and its escrow feature helps offer smooth trades, it is still worthwhile to ask, "Is Bisq safe?".

With AMM DEXs, safety is a matter that relates primarily to the codebase, but with Bisq, its greatest demerit lies elsewhere. The strengths and weaknesses of its trading process are focused largely on its arbitration and dispute resolution protocols. When trades go bad, in the sense that there is some foul play from a buyer or seller, a third party enters the scene and attempts to fix any errors. There is an inherent human element that comes into view, which can naturally cause problems to occur or arise.

Arbitrators are individuals whom the Bisq network trusts to resolve conflicts, but they are fallible, as all humans are. And so, it is reasonable to say that errors will be made, poor judgments will occur, and occasionally arbitrators may fall for scams. The Bisq decentralized exchange definitely tries to streamline the process, and so generally, things go well. But if you find yourself in a dispute, there is a definite feeling that you’ve entered the Wild West, in the sense that the protocols that exist are not the sort that can be hard-coded into the network.

When faults happen, your trades are at the complete mercy of other humans. Interestingly, this is the case with practically every centralized dispute, but many people move to DEXs so they can avoid this, and so traders who are used to those types of networks might find this a little worrisome, as the luxury of automation is not afforded to Bisq participants.

This leaves some asking, "Is Bisq safe?", and the only answer to this is that it mostly is. However, there are definitive risks that come with it due to its skeleton architecture and the necessity of human intervention. You need to exercise a level of critical thinking and research when it comes to agreeing to a trade with somebody. For this reason, the people you trade with have their own profile and reputation score built into the application.

These people are largely anonymous, but their experience with Bisq and with prior trades is visible. This allows users to avoid people who have earned bad scores. Of course, this incurs a type of bootstrapping problem, in the sense that new traders may struggle to gain the necessary reputation to attract other parties, meaning that Bisq can feel like a futile exchange for many beginners who have no score.

The human intervention needed for disputes also highlights why using unusual assets (such as loyalty points) may pose problems. The arbitrators are knowledgeable in the way that Bisq works and what types of scams might occur with common assets, but with strange or rarely seen assets, they may have less experience. This can leave you severely lacking or even financially harmed.

Limited to Bitcoin Exchanging Only

In this Bisq review, I've made a point of highlighting just how versatile it is when it comes to assets like fiat or even experimental or unusual concepts. However, it must be noted that all other assets only work when Bitcoin is involved in the trade in some way. For instance, you cannot use Bisq to trade fiat for fiat, or altcoins for other altcoins. In this sense, it is Bitcoin-centric.

For Bitcoin maximalists, those who focus on Bitcoin’s significance and underplay the importance of other assets, this is not particularly important. However, for altcoin traders or people who enjoy diversifying their portfolios, the lack of support may be frustrating. This is also not the sort of situation that is likely to change in the future, as the Bisq community views it as being primarily and necessarily an integrated part of the highly fractured Bitcoin ecosystem.

So, in terms of this Bisq review, cryptocurrencies cannot be traded on this exchange - except for Bitcoin.

This might leave people wondering where exactly BSQ, Bisq’s native token, fits within the equation. Generally speaking, it's used for governance and trading fees, and that’s it. There is no way to trade BSQ for fiat or for another cryptocurrency other than Bitcoin within the network. Even though BSQ is a major part of the project, it cannot be understated within this Bisq exchange review that it's not afforded any extra benefits and is treated like any other asset when it comes to exchanging.

Poor and Confusing User Experience

When learning about the Bisq decentralized exchange, users will find that the website is upfront about its most pressing pain-point: its user experience. Right off the bat, the project is open about the fact that many potential users find it confusing to navigate and struggle to utilize it. On one hand, this is great as it shows a level of humility that you rarely see in this highly commercial and business-oriented world. On the other hand, it can feel quite defeatist to read this, as it suggests the developers have disengaged from the matter.

On the FAQ page of their website, Bisq states that "some people find Bisq's interface intuitive, but many people don't". The project has dedicated tutorials and videos explaining how to work with it, but to some extent, the fact that they feel the need to do this suggests there is an inherent problem.

It is emblematic of an issue that the blockchain space has faced since its inception, and one that even top-performing companies like Kraken and Binance have come head-to-head with. It cannot be understated just how complex this industry can seem to users. When the blockchain world was formed, it was made up of programmers, and it is only in recent years that UX developers and people who have an eye for utility and aesthetics have stepped in.

In the current era of crypto and Web3, there has been a push to recruit UX experts, with many of them being very excited to tackle the complexities of the space. However, Bisq belongs to an age before this was viewed as a pressing matter, and it has struggled to keep up with the times and trends that people are getting used to nowadays.

One of the most noticeable limitations regarding this is its lack of a mobile or web app. To use Bisq, you must download and install an application onto your computer, meaning that you cannot access it in any simple way. Again, in the past, this would be unimportant, but in the current age of crypto, it is certainly necessary to highlight in this Bisq decentralized exchange review.

How to Use Bisq

Let’s round off this Bisq review by explaining how you can set up the application. As mentioned, it can be a little complex to perform your first trade, but luckily the installation process is relatively straightforward.

Step 1: Head to the Bisq website. On the landing page, you should see a button asking you to download the program onto your device. I will be downloading it to my Windows computer, so it presents me with a .exe file (although there is also a MacOS and Linux version available).

Step 2: After it is downloaded, click on the file and launch it. It will ask you if you would like to run the application. As of writing, this will be marked as belonging to an unknown publisher, but so long as you get this file from a reputable source, this should not be an issue.

Step 3: The installation wizard should appear. You should now choose where you want the program to install to, and initiate the process. This can take a few minutes to finish.

Step 4: After this is finished, close the installer and launch the application. You will be provided with a page that shows you that it is loading.

Step 5: Some people may face a firewall warning, noting that some elements are blocked. Tick the boxes that allow it to communicate with both private networks and public networks, and then press "Allow Access".

Step 6: You will now be provided with the Bisq exchange. Here, you can see the trades that have happened in the past, and get acquainted with the software. You will also now be able to make trades yourself.

The types of trades you do will determine how smoothly this will go, and what types of actions you need to do next. But overall, you should now have the ability to work with the network.

Pros

• A very well-known crypto exchange platform
• More than 500 different cryptos available
• Two-factor authentication

Main Features

• Over 500 different cryptocurrencies available
• Strong security
• Small withdrawal fees

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Pros

• Very low trading fees
• Exceptional functionality
• Mobile trading app

Main Features

• Very competitive trading fees
• An intuitive mobile app
• Up to 100x leverage available

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Pros

• Secure and reliable
• Low fees
• A good amount of fiat currencies accepted

Main Features

• Reputable exchange
• Multiple fiat currencies are accepted
• Relatively low trading fees

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Conclusions

This Bisq review has covered a range of areas. I have explored the questions "What is Bisq?", and "Is Bisq safe?" as well as a variety of important factors that make up the Bisq decentralized exchange. Overall, it is clear to see why this project stands out in a sea of DEXs on the market, and what makes it so significant in the Bitcoin ecosystem.

At the same time, it is clear that the project has a broad range of pros and cons. Its greatest positives hold special weight, as my Bisq crypto review has highlighted that its successes act as a testament to the sheer power and versatility of decentralization. In contrast, its negatives reflect the limitations that the technology has, and also demonstrate how behind the times the Bisq decentralized exchange can be.

My Bisq review embodies the triumphs and intricacies of decentralization in the crypto world, while also shedding light on its inherent restrictions. Whether someone would choose to use the service after reading this Bisq exchange review comes down to what they are looking for in an exchange, and whether they feel confident enough to use its dispute system.

Its features make it stick out against exchanges like Binance, Coinbase, Bybit, and others. This is true in both a good and a bad way. It is a mixed bag of features, making it undeniably one of the more interesting tools on the market. Whether these factors make it worthwhile for the average trader is debatable, however.

The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.