Understanding Basics About Bisq
In most simple terms, Bisq provides an entirely P2P environment for facilitating anonymous Bitcoin trades using fiat currencies. It works as a decentralized (DEX) exchange that works efficiently as a private and anonymous Bitcoin exchange. While many other exchanges require users to deal with KYC and bank verification, Bisq has set out to be the first DEX that allows for cross-blockchain trading.
Any user can download this app to become a part of the Bisq network and start trading with other members. It works as an ultimate network where you can buy or sell different cryptocurrencies without the role of any mediators. As a result, Bisq has become a benchmark for crypto traders looking to trade anonymously and privately.
The idea behind Bisq was coined back in 2014 by Manfred Karrer. Over the years, Bisq has developed into a strong trading tool capable of overcoming regulatory advances and the dangers of security attacks. The best part about it is non-censorship and control.
As a result, the funds you are handling on Bisq remain in your possession irrespective of your place of origin (including China). With complete possession, you can easily trade Bitcoin using Bisq.
Working Of Bisq Network
First, Bisq is designed as entirely a free software development program. This means there is a space for anyone to join in and access its source code. You can modify or improve it to create your version of Bisq.
A peer-to-peer protocol allows its different nodes to manage a decentralized exchange in this software. This exchange then carries out transactions under mutual agreements between both parties (seller and buyer). Take a look at a few vital parts of the security transactions that revolve around this protocol:
1. The addresses on the Bisq exchange are basically in 2-of-2 type with multi-signature. Therefore, each party in the transaction holds one signature, and only the combination of two can unlock the same.
2. With the help of multifima, every script and escrow operation of this exchange is completely safeguarded against any form of cheating. Furthermore, every operation or transaction on Bisq is facilitated using specifically designed scripts of Bitcoin that secures every operation.
3. It doesn’t require a full node from Bitcoin to function as it can also work through an SPV wallet. However, having a full Bitcoin node improves the level of security of the entire system. Therefore, this type of installation is the most reliable to use.
4. The P2P protocol of this platform is perfect to handle thousands of users simultaneously to ensure that during high volatility time, there are no crashes.
5. You can go through altcoins, BTC, or even fiat gateways to make any withdrawal or payment with your funds at Bisq. Before choosing any fiat gateway, just remember that fiat gateways often have a KYC process.
Since you have understood the basics and working of Bisq, now it’s time to operate. To better understand its operation process, consider an example where Martha and John are making a trade using Bisq.
First, both parties have set up their respective Bisq apps, and here Martha is going to make a Bitcoin offer. John is someone surfing through Bisq looking for all the offers listed on the platform until he comes across Martha’s offer. Now they both begin the operation. John is looking to buy an equivalent of $5000 and pay using his bank account. On the other hand, Martha also wishes to sell and receive the transfer in her bank account.
At this point, a specific communication channel is created by Bisq between these two parties (John and Martha). At the same time, a multi-signature address in BTC is also configured, which requests a small security commission from both John and Martha. This commission is a small percentage of the entire operation, which needs to be carried out and paid using BTC.
Now, John, on his end, begins the banking process while Martha has to transfer funds in BTC as a security fee onto the multi-signature created in the earlier step. After completing this banking operation, John will inform Martha that he has made payment. After Martha has confirmed payment details on her end, the protocol of starting the operation begins.
All the magic and security of this DEX protocol of Bisq lies in processing the entire operation. Martha has delivered a conditional transaction directly to the BTC network by confirming the operation. By sending this, she is also sending her BTC to this operation’s multi-signature address and also paid a percent as a security fee. The money is not yet sent to John’s account since the multi-signature doesn’t have an exit address yet. If the conditions are not matched or respected at this stage, the money will be sent back to Martha.
After the multi-signature is signed and verified on both ends, it completes the transaction, and the money reaches to respective accounts. In the end, John receives the BTC he wants, Martha gets his fiat money, and they both have also recovered their percentage of security deposit from Bisq.
Additionally, if you are going to start using Bisq, go through their list of penalties shared on their platform.
Also Read : What is the Meaning Of Bitcoin Blockchain
The Process of Using Bisq
Bisq here is a completely DAO (Decentralized Anonymous Organization) with some rules to ensure smooth working without any mediators. The best part, you do need to share any personal information or go through the KYC process to start using it. Just download the app, and you can start using it. Once set, you can use Bisq to facilitate transactions in BTC or other cryptocurrencies,
including:
1. Trading Commission
2. Mining Fees
3. Bisq Tokens
4. Deposits and withdrawal in different methods
You can always visit the official website of Bisq to download or go through the rules of using this platform. In addition, there are different downloading options for different users, such as macOS, Linux, and Windows.
Bisq is a non-centralized exchange where the entire system has a design that makes it fault-tolerant. It is also a P2P network where each transaction holds its private key. This makes it impossible for anyone else to steal your funds or over-list the currency.
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Disclaimer: This content represents the authors personal perspective and is subject to changes in market conditions. Always do your own research before investing in cryptocurrencies. The author and the publication are not accountable for any financial losses you may face.
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