With the fast-paced adoption of digital assets in the world, a lot of people are diving into the world of cryptocurrency. To cater to the demands of the public, a lot of digital assets have sprung in the market to offer their services. Through these platforms, people can trade, buy and sell their crypto assets. One of the most popular exchanges in the market is Bisq. Formerly known as Bitsquare, it’s a decentralized crypto platform that doesn’t need a third-party presence in order to operate.
What is a decentralized platform?
In understanding how Bisq works, you must first understand how decentralized platforms operate. Also known as DEX, a decentralized exchange enables peer-to-peer transactions on the internet without the need for approval from a third-party presence.
Through this exchange, fees are lower and people can ensure people that their funds and accounts are not prone to hacking by unscrupulous online crooks. Additionally, information and sensitive details about a person won’t be controlled by any central authority because no one owns the platform.
What is Bisq?
Originally, Bisq is known as Bitsquare and is one of the few decentralized exchanges in the market. This peer-to-peer trading platform comes in the form of software that you can download on your devices. What makes Bisq appealing to crypto users is that it’s not a website that owners can track, instead, it’s an open-source space where people can trade their digital assets and fiat currencies.
Bisq stands out from other exchanges because it gives users full control over their accounts, unlike with centralized exchange platforms. With Bisq, users don’t only own their assets, but they also have sole rights to their account information and other details.
When trading in the Bisq platform, users don’t need to sign up or register in order to access the services. Instead, they can just go ahead and do their transactions without waiting for any third party to approve their dealings.
The Bisq platform is a project created by a decentralised autonomous organization or DAO layered on the Bitcoin network. When it was launched, the developers wanted to create a trading platform that’s secure, private and censorship-resistant that can be used by people all over the world.
What are the advantages of using Bisq?
Here are some of the most popular advantages of using the Bisq platform:
- Secure transactions
Using centralized exchange sites can comprise the security of users’ funds because these exchanges require users to ‘hold’ their assets for a certain period of time on the server. There’s nothing wrong with this, however, when a huge number of users do it, it can compromise the safety of the site, making it vulnerable to hacking and breaches. When using decentralized platforms, users can seamlessly exchange funds on the site without having to comply with other rules imposed by the site.
Since Bisq is a decentralized exchange, users are the only one who can access their information. In centralized exchanges, people are required to input personal details such as an address, name, and contact information in order to set up an account. However, this data can be used to track a person’s transaction activity on the site. Issues such as identity theft and stolen financial credentials have been the issue before with centralized platforms.
- Censorship resistant
Censorship resistant sites mean that the users can do their transactions without the presence of intermediaries. The drawback of using centralized exchange sites is that there is interference from third parties that can run the risk of expensive fees and time constraints. However, Bisq users can easily send and receive funds any time of the day because the software isn’t run by a central authority.
How does Bisq work?
Bisq doesn’t work like regular exchanges in the market. For example, if you’re interested in buying Bitcoins in exchange for your local currency, in the network, you’re a BTC buyer looking for someone who’s selling in BTC who will accept whatever currency you have. To finalize your transactions, here are some steps you need to follow:
- You need to download the Bisq software on any device. You can use your laptop, mobile, or tablet. The unique feature of Bisq is that it doesn’t automatically match buyers with sellers. Instead, buyers have to manually search for offers that match their preferences.
- Once done, you can set your payment method depending on your preference. You can use bank transfers, money order or credit/debit cards.
- When your account and payment method is set up, browse the Bisq site to see the currencies they’re offering. Look for the currency you’re using and see if they offer the coins you want to be exchanged.
- Once you see an offer, you can get it by making a deal with the seller. If the seller agrees, you can now exchange funds through the Bisq platform. After sending your payments, the system will confirm it and will provide you with a receipt to verify your transaction.
XHow does Bisq keep your finds secure?
Bisq is a non-custodial exchange that enables users to take control of their own funds. However, to keep them secured, the system uses a 2-of-2 multi-sig escrow. Additionally, both buyers and sellers are required to place security deposits to prevent fraud. When issues arise in the network, it will be mediated by a team of experts.
How does Bisq keep user information private?
All Bisq applications feature a Tor hidden service that keeps information secure. Since their software doesn’t have a central server, all the information happening within the system has no copy so it cannot be used for corrupt purposes. Additionally, Bisq is encrypted so all the details are visible to only the parties doing a transaction. Moreover, the ToR feature of the exchange makes it censorship-resistant.