What is Bisq?
Bisq is one of the few decentralized exchanges out there that supports fiat to crypto pairings. This means that no middleman or third party is used and trades are settled directly between the seller and the buyer. Done completely private and without the need of registration or KYC/AML. And since the system is peer-to-peer there is no single point of failure or exchange holding your money, it is very safe to use. Pretty cool eh?
So if you want to try out a decentralized exchange this beginner’s guide on how to buy bitcoin on Bisq is the perfect start.
How does Bisq work?
Bisq achieves its security and decentralization by not holding any bitcoins whatsoever. These are instead held in multisignature addresses while the fiat currency is transferred directly from the buyer to the seller. This is also done over the Peer-to-Peer network Tor, meaning that there are no servers that can be hacked. Bisq is actually not even a company but an open source project organized as a DAO, a Decentralized Autonomous Organisation. By requiring security deposits from both the buyer and the seller they are incentivized to follow the rules. These are then locked in an escrow that releases the funds after the trade is completed and everything went smoothly.
How to buy bitcoin on Bisq
Step 1. Get the software
Bisq is not your regular exchange that you use through a website. Instead, you head to the download page on the Bisq official website and get the application fitting your Windows/Mac/Linux-device.
Step 2. Run the application
This is the view of Bisq’s order book, which you’ll find on the front page. By toggling the Currency selector you can pick the currency you want to exchange in and find the matching order book. For this guide, we will stick with euro and as you can see in the image above there are currently 31 offers on the market.
Step 3. Create a trading account
Before you can buy or sell any bitcoin you need to set up a trading account. This you do by heading over to the Account tab. And fill in your preferences. Above I picked the payment app Revolut as my payment method but most kinds of methods are accepted. As a safety precaution be sure to write down your Wallet Seed and put it in some safes spaces, as well as download the Backup. In the case of your computer crashing or something worse, you can then restore the application and your funds.
Step 4. Head to Buy BTC & make your first order
Once you got your account set up you are ready to start buying/selling your bitcoins. There are two ways you can go about doing this. Either you accept take other trader’s offer that they put out on the market. Or you’ll create your own offer and wait for another trader to match it. This is similar to the Maker vs. Taker concept we explain in this article. In this guide, we’ll go the more straightforward and easier way and take an offer already on the market.
Step 5. Fund the trade
After selecting the offer you are interested in taking you’ll get to next page where you fill in how much you want to buy. Here I intend to buy the close to the minimum amount from this trader, which is 0.02 BTC for the price of 117.58 EUR.
To put down the deposit for this trade you can either use the Bisq wallet or an external wallet on your computer. I’ve chosen to send the required bitcoin to my Bisq wallet since I hade that amount laying in my android wallet anyways. One thing to notice here is the high mining fee of 8,74 %. This makes Bisq very expensive to use for buying small sums such as 0.02 BTC. And it is really only worth paying if you think the privacy and security that comes with decentralization is worth paying that extra amount, or if you’re purchasing larger amounts of bitcoin the percentage fee drops. The fee also drops a lot if put your own offer on the market instead of taking someone else.
Step 6. Confirm the trade
Next step is that you get the chance to verify the information of the trade and double-check that everything is correct before you confirm it.
Step 7. Begin the trade process
This is finally the step when the actual trade happens. The first thing to happen is that the deposits are confirmed on the blockchain. If the trade is of a substantial amount we recommend waiting for at least 6 confirmations to be safe. After that hour is passed it is your turn to complete the payment to the seller. In this case, where I used Revolut, this meant sending the money through the Revolut app, for free and instantly. After that, you just have to wait for the seller to confirm that the payment has arrived.
Step 8. Success!
As soon as the seller has confirmed the received payment your precious bitcoin is released along with the deposit you paid for the trade. You just completed your first bitcoin investment on a decentralized exchange, well done!!
Now you’re ready to withdraw your freshly acquired bitcoin from Bisq to your regular wallet. I always recommend using a hardware wallet for storing any substantial amount of bitcoin. Ledger is my go-to choice and if you use this link to purchase one you’ll support us in running Exchange Comparer and producing more guides like this. 👍