Bisq

Last updated: July 22, 2025

1. What Is Bisq?

Bisq is a decentralized, non‑custodial, privacy‑preserving peer‑to‑peer (P2P) exchange for buying and selling bitcoin and a rotating set of altcoins (notably Monero) using fiat payment rails or other cryptocurrencies. Unlike centralized exchanges (CEXs):

• No KYC / identity upload required.
• No central company holding user funds.
• Trades are conducted directly between peers using a multisig escrow model (2‑of‑2 with a mediator path; historically 2‑of‑3 with arbitrators — see current docs in‑app).
• Communication and trade coordination happen over a Tor‑transported P2P network built into the Bisq application.

Why use Bisq? Privacy, censorship resistance, permissionless onboarding, and control over your keys.

2. Key Concepts You Should Understand First

2.1 Decentralization & Network Architecture

Bisq is software you run locally. There is no web account to sign up for. Each Bisq node (your app) connects over Tor to discover offers, negotiate trades, and exchange secure messages. The network is designed so there is no single server that can be shut down to stop trading.

2.2 Non‑Custodial Escrow with Security Deposits

When two traders agree on a trade, each must lock a security deposit plus the trade amount into a multi‑signature bitcoin transaction (details evolve; always read the current trade flow shown for your payment method). Deposits disincentivize fraud: if either trader misbehaves, they risk losing part or all of their deposit during dispute resolution.

2.3 Trade Protocol Phases (High Level)

1. Offer creation / discovery – Someone posts a buy or sell offer.
2. Offer take – The counterparty accepts.
3. Escrow lockup – Funds + deposits move into a temporary, protocol‑controlled escrow transaction.
4. Fiat (or altcoin) payment – The buyer pays the seller off‑chain (bank transfer, SEPA, Revolut, cash deposit, etc.) OR sends altcoin on its native chain.
5. Confirmation – Seller confirms receipt.
6. Payout – Escrow releases BTC (and deposits) to the respective parties.
7. Fees & reporting – Network fees, Bisq fees, and DAO governance tokens apply (varies by config).

2.4 Trade Roles: Maker vs Taker

• Maker posts an offer visible to the network.
• Taker accepts an existing offer and initiates the trade flow. Takers typically pay slightly higher fees.

2.5 Payment Accounts & Limits

For each fiat payment method, Bisq enforces trade size limits that gradually increase with successful history to reduce fraud risk (chargebacks, reversals). Expect smaller limits at first — that’s normal.

2.6 Bisq DAO & BSQ Token (Optional But Useful to Know)

Bisq is governed by a DAO whose participants use the BSQ token (a colored bitcoin) to vote on proposals, compensation, and parameter changes. Paying fees in BSQ is cheaper than in on‑chain BTC, but you don’t need BSQ to get started trading.

3. System Requirements & Security Mindset

3.1 Supported Platforms

Bisq runs on Windows, macOS, and Linux. Use the official binaries from the Bisq release site or verified GitHub releases. Prefer reproducible builds and signature verification when possible.

3.2 Security Checklist Before You Install

• ✅ Update your OS before installing.
• ✅ Verify PGP signatures for the Bisq installer (strongly recommended).
• ✅ Use a dedicated machine or hardened profile if you plan to trade regularly or in hostile jurisdictions.
• ✅ Ensure you have reliable Tor connectivity (Bisq bundles Tor; no external setup required, but restrictive firewalls may interfere).

3.3 Backup Discipline

Bisq stores local application data containing your wallet keys, trade history, payment accounts, and dispute records. Back up your data directory (see Settings → Account → Backup in‑app) after creating payment accounts and after each successful trade cycle.

Tip: Automate encrypted, versioned backups to offline or hidden storage. Losing your Bisq data can make dispute resolution difficult.

4. Installing Bisq (Step‑by‑Step)

1. Download: Go to https://bisq.network/downloads/ and grab the installer for your OS.

2. Verify: Download the signature and developer signing keys. Verify using GPG:

   gpg --keyserver hkps://keys.openpgp.org --recv-keys <BISQ_SIGNING_KEY_ID>
   gpg --verify Bisq-<version>.dmg.asc Bisq-<version>.dmg
   

3. Install: Run the installer as normal for your OS.

4. First Launch: Bisq will bootstrap over Tor. This can take a few minutes the first time.

5. Create an Encrypted Password (Optional but Recommended): Protects UI access.

5. First‑Run Configuration

5.1 Set Your Fiat Currencies & Locale

Under Settings → Preferences, choose the default fiat currency you’ll be trading against BTC (e.g., USD, EUR, GBP, KHR, etc.). This affects default filters and price displays.

5.2 Connect to a Bitcoin Node (Optional Advanced)

Bisq can use:

• Its built‑in SPV mode (simplified verification)
• Your own full node (recommended for privacy & trust minimization)

Go to Settings → Network Info and configure a Bitcoin Core RPC or Tor‑hidden node endpoint if you operate one.

5.3 Enable or Review Tor Settings

Bisq uses Tor by default. Confirm it hasn’t fallen back to clearnet (rare). Advanced users may route through bridges or custom Tor setups.

6. Funding Your Bisq Wallet

You’ll need a small amount of on‑chain BTC in your Bisq internal wallet to:

• Pay trading fees.
• Post offers (maker deposits).
• Take offers (escrow + fees).

6.1 Find Your Bisq Deposit Address

In the Funds tab, copy a new receive address. Send a test amount from an external wallet you control.

6.2 Wait for Confirmations

Most Bisq actions require on‑chain confirmations. For a first trade, wait for at least 1–3 confirmations before attempting to take or post offers.

Note: Don’t send funds from a KYC exchange if privacy is a priority. Consider CoinJoin or non‑KYC acquisition paths.

7. Adding a Fiat (or Altcoin) Payment Account

Before you can trade, you must define how you will pay or receive value off‑chain.

7.1 Common Fiat Payment Methods

• SEPA (EUR area)
• ACH / Zelle (US)
• Faster Payments (UK)
• Revolut / Wise
• Cash deposit
• Interac e‑Transfer (CA)

Each method has its own required metadata (IBAN, account name, routing code, etc.) and its own risk level.

7.2 Account Ageing & Limits

New accounts begin with low trade limits (e.g., a few hundred equivalent). After successful completed trades over time, limits rise automatically. This is a core Bisq safety mechanism.

7.3 Adding Monero (or Other Altcoin) as a Payment Method

Bisq often lists XMR/BTC markets. To trade Bitcoin for Monero:

1. Add an altcoin payment account and paste your Monero receive address.
2. Confirm network fee expectations — altcoin sends occur on their native chain outside Bisq escrow.

8. Your First Trade (Walkthrough)

Let’s assume you want to buy bitcoin with a bank transfer (you are the buyer of BTC / fiat payer).

8.1 Find an Offer

• Go to the Buy BTC tab.
• Filter by your payment method.
• Review available offers: price premium/discount vs market, trade size, limits, maker reputation.

8.2 Take the Offer

Click Take Offer to Buy BTC. You’ll see a confirmation dialog showing:

• Total BTC you’ll receive
• Fiat you must send
• Security deposit required
• Bisq trading + mining fees

8.3 Lock Funds into Escrow

Bisq will construct a transaction from your internal wallet to fund: your security deposit + trade funds (if you’re the BTC seller) or just your deposit (if you’re the buyer). Confirm.

8.4 Off‑Chain Fiat Payment

Once escrow is funded and the trade starts, Bisq displays the seller’s bank details. Send the fiat payment exactly as instructed (reference fields matter). Mark as Payment Sent in Bisq only after you’ve actually sent it.

8.5 Seller Confirms Receipt

The seller checks their bank, confirms receipt in Bisq, and the protocol releases the BTC payout to you.

8.6 Funds Arrive in Your Bisq Wallet

Once on‑chain confirmed, the BTC becomes spendable in your internal Bisq wallet. You can withdraw to cold storage.

9. Selling Bitcoin (Reverse Flow)

When you sell BTC for fiat:

1. Post a sell offer (become a maker) or take a buy offer.
2. Bisq locks your BTC + deposit into escrow.
3. Wait for fiat to arrive from the buyer.
4. Confirm receipt → escrow releases fiat‑payer’s deposit + your trade settlement.

Watch for chargeback‑prone payment methods. Favor irreversible rails or well‑rated counterparties.

10. Trading Bitcoin ↔ Monero in Bisq

This is popular for privacy stackers:

1. Ensure you have both BTC in Bisq and an external Monero wallet.
2. In the Altcoin tab, choose XMR/BTC market.
3. Offers show XMR price denominated in BTC.
4. Trade flow is similar, but the non‑BTC side settles via a Monero transaction that the counterparty performs manually.
5. Timing windows: Monero transactions can take longer to confirm (10 block target time). Bisq trade timers account for this, but respond promptly to avoid disputes.

11. Fees: What You’ll Pay & Why

You’ll typically see 3 fee categories per trade:

Fees vary by network conditions. Always review before confirming a trade.

12. Disputes, Mediation & Arbitration

Sometimes fiat doesn’t arrive, names don’t match, or one party goes silent. Bisq includes dispute‑resolution roles:

12.1 Mediators

First line of soft conflict resolution. They review evidence (chat logs, payment proofs) and suggest a payout split.

12.2 Refund Agents / Arbitrators (Legacy vs Current Model)

Older Bisq versions used bonded arbitrators with signing authority in 2‑of‑3 multisig. Current flows depend on payment method and protocol updates; some rely on time‑locked payout transactions plus mediation.

12.3 What You Should Keep as Evidence

• Screenshots / PDFs of bank transfer receipts.
• Blockchain TXIDs for altcoin sends.
• Bisq trade ID and chat transcript.

Respond quickly during dispute windows; inaction can lead to unfavorable resolution.

13. Privacy & Operational Security (OpSec)

13.1 Reduce Linkage Between Identity & Trades

• Use names that match your bank account only within Bisq; do not overshare.
• Don’t reuse addresses across unrelated trades.
• Rotate external wallets.

13.2 Network Privacy

All Bisq traffic runs over Tor. Avoid running parallel clearnet logins or doxxing activity in the same session.

13.3 Fiat Trail Minimization

If privacy is critical, prefer payment methods that don’t reveal your full legal identity to counterparties (cash, money orders, certain fintech rails) — but weigh fraud risk.

14. Good Trading Habits

• Start small. Gain trust & reputation.
• Be punctual. Execute payments quickly; confirm receipt promptly.
• Read the payment instructions carefully. Missing a reference string can stall a trade.
• Keep Bisq updated. Protocol & safety updates matter.
• Monitor mempool fees. Lowball fees can delay escrow transactions and anger counterparties.

15. Troubleshooting Common Issues

16. Migrating or Restoring Bisq Data

If you reinstall or move computers:

1. Locate your Bisq data directory (varies by OS; see in‑app). Copy entire folder.
2. Install Bisq on the new machine.
3. Replace the new data directory with your backup (while Bisq is closed).
4. Launch & verify wallet balance and payment accounts.

Warning: Never run the same Bisq data directory simultaneously on two machines. You can corrupt your state.

17. Advanced: Running Bisq with Your Own Bitcoin Full Node

Power users can pair Bisq with a personal Bitcoin Core node for improved trust minimization:

1. Run bitcoind (ideally over Tor or I2P).
2. Expose RPC credentials locally or via Tor hidden service.
3. In Bisq Settings → Network Info choose Use Custom Bitcoin Node.
4. Paste credentials / onion address.
5. Restart Bisq; verify headers sync from your node.

18. Advanced: Headless / Remote Operation

Although Bisq is primarily GUI‑driven, some workflows can be scripted or remotely controlled (community tools exist; APIs are limited and unofficial). For operations trading desks use:

• Dedicated VPS with graphical forwarding over SSH + Tor.
• Encrypted remote desktop into an air‑gapped Bisq box that only signs trades.

Research current tooling in the Bisq forums / Matrix rooms before automating.

19. Security Model Deep Dive (Optional Reading)

Threats Bisq Mitigates:

• Central exchange seizure risk.
• Account freezes & KYC surveillance.
• Custodial misappropriation.

Threats You Must Still Manage:

• Fiat chargebacks / reversals.
• Social engineering (fake confirmations).
• Local malware stealing your Bisq wallet seed.

Bisq’s layered security = escrow deposits + trade windows + bonded roles + DAO oversight. But human discipline completes the model.

20. Glossary (Quick Reference)

21. Where to Get Help

• In‑App Help: Help menu → Guides.
• Bisq Docs: https://bisq.wiki
• Community Chat: Matrix & IRC bridges listed on the wiki.
• GitHub Issues: Bug reports & feature requests.
• Dispute Support: Use in‑trade chat & mediator escalation flow.

22. Your Next Steps

1. Install Bisq & verify signatures.
2. Fund your Bisq wallet with a small BTC amount.
3. Add one fiat payment method.
4. Take a tiny test trade.
5. Practice backup/export/restore.

Once you’ve completed 2–3 successful small trades, you’ll be ready to scale up with more confidence.

Final Thought

Bisq is slower and sometimes clunkier than logging into a big exchange — and that’s the point. Freedom, privacy, and self‑custody take a little work. Once you’re comfortable, you’ll never look at KYC exchanges the same way again.

Happy (private) trading! 🚀