Difference between revisions of "BSQ"

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'''BSQ''' colored bitcoin tokens are the unit of account for the Bisq DAO.
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'''BSQ''' is the utility token of the Bisq [[Introduction to the DAO|DAO]], used for governance participation and optionally paying [[Trading fees|trading fees]] at a discount. Technically, it is implemented as '''colored''' bitcoin tokens. This means BSQ functions as a token layer on the Bitcoin blockchain, where specific satoshis represent BSQ units recognized as distinct from regular bitcoin '''only within the Bisq software wallet'''. The easiest way to obtain BSQ via trade is through [[BSQ_swaps|BSQ swaps]].
  
 
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== BSQ Token ==
 
== BSQ Token ==
  
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A BSQ token is a '''coloured coin''' on the Bitcoin blockchain. A single BSQ token is defined to be 100 satoshis with some additional properties that identify it as BSQ in Bisq software.
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{{BSQ_Token_Intro}}
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=== BSQ vs BTC ===
  
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Outside Bisq, a BSQ token just looks like a few satoshis. But on Bisq, the additional properties have the following results:
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You can observe the difference between a standard BTC transaction and a BSQ transaction (which is also a BTC transaction but interpreted differently by Bisq) using block explorers:
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* Example: [https://mempool.space/tx/0243f99c848de4f53cb29157d10bf1cdbfcf4219f84e9997dd3cac9244ab7242 View sample TX on a standard BTC block explorer]
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* the satoshis take on the market value of a BSQ token
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* Example: [https://mempool.space/bisq/tx/0243f99c848de4f53cb29157d10bf1cdbfcf4219f84e9997dd3cac9244ab7242 View the same sample TX on Bisq's BSQ explorer]
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* the owner of the satoshis is endowed with power to participate in various Bisq governance functions
 
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You can learn the basics of coloured coins [https://youtube.com/watch?v=xQTNigsrlO4 in this 3-minute video] or see a longer treatment of the topic [https://www.youtube.com/watch?v=68_DU1c0Cac in this interview]. Technical details of BSQ tokens are available [[Bisq_DAO_technical_overview|in this document]].
 
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=== BSQ v BTC ===
 
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You can see how the characteristics of a BSQ transaction differ by viewing them side-by-side on a BTC explorer and a BSQ explorer:
 
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* [https://mempool.space/tx/0243f99c848de4f53cb29157d10bf1cdbfcf4219f84e9997dd3cac9244ab7242 txid 0243f99c848de4f53cb29157d10bf1cdbfcf4219f84e9997dd3cac9244ab7242 on a BTC block explorer]
 
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* [https://mempool.space/bisq/tx/0243f99c848de4f53cb29157d10bf1cdbfcf4219f84e9997dd3cac9244ab7242 txid 0243f99c848de4f53cb29157d10bf1cdbfcf4219f84e9997dd3cac9244ab7242 on a BSQ block explorer]
 
  
 
=== BSQ Trading ===
 
=== BSQ Trading ===
  
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Because BSQ tokens are only recognized by Bisq software, BSQ trading can only take place in Bisq software.
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Because BSQ tokens are only recognized as having special properties by Bisq software, BSQ trading primarily takes place '''within the Bisq application''' using [[BSQ_swaps|BSQ swaps]].
  
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While BSQ is just bitcoin, it should only be stored in a Bisq wallet.
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While BSQ fundamentally consists of bitcoin satoshis, it requires special handling. It should '''only be stored in and sent from the built-in Bisq wallet'''.
  
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{{Admonition_Warn|Please '''do not try to send BSQ to a non-Bisq wallet''', or to otherwise create your own BSQ transactions. The rules to form a valid BSQ transaction are rather complex, and even the slightest error can result in invalid BSQ. Even the [[DAO_technical_overview|technical overview]] does not cover every single detail—the only complete reference is the source code. Also note that future code changes may break custom transactions or implementations. Bisq will NOT provide support for any such cases.}}
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{{Admonition_Warn|'''Do not attempt to send BSQ to a non-Bisq wallet''' (e.g., another Bitcoin wallet or an exchange) or create custom BSQ transactions manually. The rules for valid BSQ transactions are complex and enforced by the Bisq software. Errors can lead to the BSQ value being unrecognized or lost (becoming plain satoshis). The [[DAO_technical_overview|technical overview]] provides details, but the source code is the ultimate reference. Future software updates may also break custom implementations. '''Bisq cannot provide support for recovering BSQ sent outside the Bisq wallet ecosystem.'''}}
  
 
=== BSQ Issuance ===
 
=== BSQ Issuance ===
  
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After the genesis transaction in April 2019, BSQ can only be created through an issuance transaction (compensation request or reimbursement request). See more on BSQ's [[Introduction_to_the_DAO#Overview|issuance and burn dynamic]].
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BSQ was initially created in a genesis transaction in April 2019. Since then, new BSQ is '''only created through the Bisq DAO''' via approved compensation or reimbursement requests submitted by contributors. BSQ is 'burned' (destroyed) when used to pay trading fees. Learn more about the [[Introduction_to_the_DAO#Overview|BSQ issuance and burn dynamic]].
  
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{{Admonition_Note|The BSQ token is not associated with any kind of initial coin offering (ICO) or capital-raising initiative. It’s merely a tool to decentralize the governance of the already-functional Bisq exchange service. As of December 2018, Bisq has facilitated over 19,000 trades without major incident since it went into production in April 2016.}}
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{{Admonition_Note|'''BSQ is not an ICO token.''' It was never sold to raise capital. It functions purely as a utility token to enable decentralized governance and funding for the Bisq network, which has been operational since 2016.}}
  
 
== BSQ Wallet ==
 
== BSQ Wallet ==
  
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BSQ is stored in a Bitcoin wallet, but the Bisq software takes several measures to keep BSQ and BTC separate to prevent mixing the two by accident. On disk, BTC and BSQ wallets are stored in separate files. In the Bisq interface, BSQ wallets are prefixed with a 'B' to prevent users from mistakenly using BSQ as BTC.
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BSQ is stored within the user's standard Bisq Bitcoin wallet file but is managed separately by the software to prevent accidental mixing with regular BTC.
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* '''Separate Balances:''' The UI shows distinct BTC and BSQ balances.
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As an additional protection measure, Bisq wallets use a special BIP-44 [[Restoring_your_wallet_from_seed#Restoring_to_a_non-Bisq_wallet|derivation path]] that other wallets won’t understand.
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* '''Separate Files (Internal):''' Wallet data for BTC and BSQ are stored in separate internal files within the [[Data directory]].
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* '''Address Prefix:''' BSQ addresses displayed in the UI are prefixed with a 'B' to distinguish them visually from standard BTC addresses.
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* '''Derivation Path:''' Bisq uses a unique BIP-44 [[Restoring_your_wallet_from_seed#Restoring_to_a_non-Bisq_wallet|derivation path]] for its wallets, making them generally incompatible with external wallet software for direct recovery (though BTC funds can be recovered using the seed phrase with specific steps).
  
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For user convenience, the built-in Bisq wallets for BTC and BSQ share the same seed.
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For user convenience, the BTC and BSQ wallets within Bisq share the same seed phrase.
  
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More details are in the [[DAO_technical_overview|technical overview]]. Also see how to [[buy BSQ]].
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More technical details can be found in the [[DAO user reference]] and [[DAO technical overview]]. See also [[How_to_buy_BSQ_on_Bisq|how to buy BSQ]] using swaps.
  
 
[[Category:DAO]]
 
[[Category:DAO]]
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[[Category:BSQ]]

Latest revision as of 03:56, 22 April 2025

BSQ is the utility token of the Bisq DAO, used for governance participation and optionally paying trading fees at a discount. Technically, it is implemented as colored bitcoin tokens. This means BSQ functions as a token layer on the Bitcoin blockchain, where specific satoshis represent BSQ units recognized as distinct from regular bitcoin only within the Bisq software wallet. The easiest way to obtain BSQ via trade is through BSQ swaps.

BSQ Token

A BSQ token is a colored coin on the Bitcoin blockchain. A single BSQ token is defined to be 100 satoshis with some additional properties that identify it as BSQ in Bisq software.

Outside Bisq, a BSQ token just looks like a few satoshis. But on Bisq, the additional properties have the following results:

  • the satoshis take on the market value of a BSQ token
  • the owner of the satoshis is endowed with power to participate in various Bisq governance functions

Technical details of BSQ tokens are available in this document.

BSQ vs BTC

You can observe the difference between a standard BTC transaction and a BSQ transaction (which is also a BTC transaction but interpreted differently by Bisq) using block explorers:

BSQ Trading

Because BSQ tokens are only recognized as having special properties by Bisq software, BSQ trading primarily takes place within the Bisq application using BSQ swaps.

While BSQ fundamentally consists of bitcoin satoshis, it requires special handling. It should only be stored in and sent from the built-in Bisq wallet.

Warn
 Do not attempt to send BSQ to a non-Bisq wallet (e.g., another Bitcoin wallet or an exchange) or create custom BSQ transactions manually. The rules for valid BSQ transactions are complex and enforced by the Bisq software. Errors can lead to the BSQ value being unrecognized or lost (becoming plain satoshis). The technical overview provides details, but the source code is the ultimate reference. Future software updates may also break custom implementations. Bisq cannot provide support for recovering BSQ sent outside the Bisq wallet ecosystem.

BSQ Issuance

BSQ was initially created in a genesis transaction in April 2019. Since then, new BSQ is only created through the Bisq DAO via approved compensation or reimbursement requests submitted by contributors. BSQ is 'burned' (destroyed) when used to pay trading fees. Learn more about the BSQ issuance and burn dynamic.

Note
 BSQ is not an ICO token. It was never sold to raise capital. It functions purely as a utility token to enable decentralized governance and funding for the Bisq network, which has been operational since 2016.

BSQ Wallet

BSQ is stored within the user's standard Bisq Bitcoin wallet file but is managed separately by the software to prevent accidental mixing with regular BTC.

  • Separate Balances: The UI shows distinct BTC and BSQ balances.
  • Separate Files (Internal): Wallet data for BTC and BSQ are stored in separate internal files within the Data directory.
  • Address Prefix: BSQ addresses displayed in the UI are prefixed with a 'B' to distinguish them visually from standard BTC addresses.
  • Derivation Path: Bisq uses a unique BIP-44 derivation path for its wallets, making them generally incompatible with external wallet software for direct recovery (though BTC funds can be recovered using the seed phrase with specific steps).

For user convenience, the BTC and BSQ wallets within Bisq share the same seed phrase.

More technical details can be found in the DAO user reference and DAO technical overview. See also how to buy BSQ using swaps.

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