Difference between revisions of "Informal Market for Small BTC Trades"

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m (Plebeian9000 moved page Keybase-Buy Bitcoin to Informal Market for Small BTC Trades: remove "keybase" and "buy-bitcoin" from page title to address utility instead of implementation)
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'''Keybase #buy-bitcoin''' Using Keybase as a way to buy Bitcoin is based on a proposal to increase accessibility to Bisq for new traders with no funds for security deposit, trading and mining fees.
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To help new Bisq users who don't already have enough bitcoin to use Bisq, there is an '''informal market for small BTC trades'''.  
  
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You can see the Git Hub proposal here: https://github.com/bisq-network/proposals/issues/283
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Trades take place on the <code>#buy-bitcoin</code> channel in the Bisq Keybase team.
  
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The #buy-bitcoin channel in Bisq support is effectively an over the counter (OTC) way of users purchasing small amounts of Bitcoin (BTC). The agreement to buy / sell BTC is made between the two traders and the trade occurs outside the Bisq Network. Therefore it is important to know that trades are NOT covered by the Bisq DAO, or other great security protections that Bisq has such as multi-signature wallets, mediation, arbitration and the DAO.
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This article covers benefits, risks, and rules to be aware of when using this informal BTC marketplace.
  
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Buying BTC using Keybase comes at a much higher risk than buying BTC on Bisq. Therefore Keybase #buy-bitcoin should only be used by buyers and sellers that are both aware of the risks and trading amounts of 0.007 BTC or lower.
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{{Admonition_Warn|This marketplace takes the form of a Keybase chat channel, so trades are NOT secured by any of the security mechanisms of Bisq software (e.g. multi-signature escrows, mediation, arbitration, DAO, etc).
  
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This article covers what to be aware of and what rules to follow when using this payment method for buying and selling bitcoin on Keybase. When trading using #buy-bitcoin it is essential that you understand the trade rules:
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Therefore be aware that such trading is inherently risky.}}
  
 
__TOC__
 
__TOC__
  
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== Background ==
  
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= Background - why #buy-bitcoin exists =
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For new users, Bisq requires ~0.002 BTC for traders to make their first trade:
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* 0.001 BTC security deposit
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* 0.001 BTC miner fees and trade fees
  
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For new users of the platform Bisq requires approximately 0.002 BTC for traders to make their first trade.
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It can be difficult for new bitcoiners to acquire this bitcoin, so this requirement is often a barrier for new Bisq users. The <code>#buy-bitcoin</code> channel offers one possible way to get this initial bitcoin without having signing up for a centralized exchange.  
  
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This is made up of:
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Other solutions are listed [[Funding_your_wallet#How_to_Obtain_Your_First_Bitcoin|here]].
  
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* 0.001 BTC Security deposit
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== Risks ==
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* 0.001 BTC Miner and Trade fees
 
  
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New users of Bisq that have no Bitcoin often ask in Bisq channels how they can acquire their first Bitcoin to start trading.
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Risks of using the <code>#buy-bitcoin</code> channel:
  
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#Buy-bitcoin has been set up to help new Bitcoiners get their first Bitcoin so they can start to use Bisq.
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* Not entirely anonymous - Keybase is a centralized service that probably logs IP address and other usage metrics that may reveal your identity
 +
* Must trust traders - Keybase trades are not secured by deposits as they are on Bisq
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* No dispute resolution - Keybase trades depend solely on user reputation, so there's no recourse if something goes wrong
  
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Other recommended ways to get your first Bitcoin if you do not want to use #buy-bitcoin are:
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'''Make sure you understand these risks before trading on <code>#buy-bitcoin</code>.'''
  
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* Find a friend that has some BTC you can purchase from them.
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== Trading rules ==
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* Find a Bitcoin ATM local to you that you can exchange your fiat for BTC.
 
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* Purchase a small amount from a centralized exchange (this will require you to give ID information to the exchange).
 
  
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Most Bisq users are keen to keep their BTC purchases private and therefore are not keen on centralized exchanges and the requirements of KYC (know your customer).
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To maximize the chances that trades go smoothly, the following rules apply to trades in the <code>#buy-bitcoin</code> channel:
  
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More and more countries have introduced regulation for Bitcoin exchanges and even ATMs to require users to complete KYC. It is becoming increasingly difficult for people to purchase Bitcoin without KYC.
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* Maximum trade size is 0.002 BTC. BTC buyers can buy a maximum of 0.002 BTC in one transaction. BTC sellers can sell a maximum of 0.002 BTC in one transaction.
 +
* Traders can negotiate their prices. Sellers of BTC will likely charge a premium of 15% over the market price for their bitcoin to cover mining fees, time, and profit. Expect different sellers to charge different amounts.
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* BTC buyers should post on the <code>#buy-bitcoin</code> channel the amount they are looking to buy, the payment method they are looking to use, and which currency they wish to make payment in: for example, "I am looking to buy 0.007 BTC with GBP using Revolut. Is anyone online willing to take this offer?"
 +
* Trades between interested parties can be negotiated and settled in direct messages.
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* Only [[Payment methods|payment methods]] used in Bisq are allowed. Preference should be given to those with immediate payment: e.g. Revolut, TransferWise, SEPA Instant, Zelle, Faster Payments etc.
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* Any trader can be kicked out of the channel at the discretion of the channel owner
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* '''There are no refunds, no mediation, no arbitration, and no dispute resolution of any kind available.''' Beware!
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* DAO compensation requests or reimbursement requests related to such trades are not allowed.
  
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#Buy-bitcoin is a way to make a BTC purchase without KYC.
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The <code>#buy-bitcoin</code> channel is moderated to preclude foul play and bad actors.
  
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= Benefits to new traders with no Bitcoin=
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== Advice ==
  
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The benefits #buy-bitcoin provides to new traders with no BTC is the following:
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Consider evaluating the reputation of sellers in the <code>#buy-bitcoin</code> channel by checking out the links (Github, Twitter, Reddit etc) listed on their Keybase profile. Just note that profiles that appear strong are not guarantees that trades will go successfully.
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* A user without verified links on their profile should be considered a red flag.
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* A user with verified links, but with profiles that were only recently set up, should also be considered a red flag.
  
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* Semi Private.
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BTC buyers take on more risk than BTC sellers, since they could be sending funds to an untrustworthy user.
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* Semi Anonymous.
 
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* No KYC required.
 
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* A quick and easy way to get their first BTC in a person to person (P2P) manner.
 
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* Chance to get early access to the Bisq community.
 
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* Opportunity to start their BTC journey getting familiar with Keybase.  
 
  
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Keybase is a fantastic resource for Bisq users. Bisq wants traders first experiences of Bisq to be positive and Keybase helps to achieve this.
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Although BTC sellers take on less risk, relatively speaking, they should strive to use payment methods with the lowest possible chargeback risk.
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= Risks to users trading using #buy-bitcoin =
 
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The risks to user using #buy-bitcoin to purchase Bitcoin are the following:
 
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* Only semi Private.
 
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* Only semi Anonymous.
 
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* Relies on trust and reputation of the traders. This is much different from Bisq. Bisq does not require trust as the software means your can trade securely with strangers on the internet.
 
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* Reputation damage for traders if trades go wrong.
 
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* No mediation if things go wrong for traders.
 
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Traders should ensure they are aware of the risks when using #buy-bitcoin to purchase Bitcoin.
 
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= Creating a Keybase account =
 
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To access #buy-bitcoin on Bisq you will first need to create a Keybase account and join the [https://keybase.io/team/bisq Bisq Keybase team].
 
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You can access Keybase on multiple devices. Once you have joined the Bisq Keybase team you will need to join the #buy-bitcoin channel.
 
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Keybase is pretty easy to use once you have the hand of it. For helpful information about the Keybase features see the [https://book.keybase.io/ Keybase Book] for a guide to using Keybase.
 
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= #Buy-bitcoin Trading Rules =
 
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To increase the chance of trades going smoothly. #buy-bitcoin has the following trading rules that all buyers and sellers must adhere to.
 
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* The maximum trade size on #Buy-bitcoin is 0.002 BTC. BTC buyers can buy a maximum of 0.002 BTC in one transaction. BTC sellers can buy a maximum of 0.002 BTC in one transaction.
 
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* Traders can negotiate their prices. Sellers of BTC will likely charge around 15% over the market price for Bitcoin. This is to cover their mining fees, time, and for them to make a profit. Different sellers will charge different amounts.
 
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* BTC buyers should post on # buy-bitcoin what they are looking to buy, what payment method they are looking to use and what currency they wish to make payment in, eg "I am looking to buy 0.007 BTC using Revolut using GBP is anyone online that can take the offer".
 
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* Trades between interested parties can be taken to DMs negotiated and completed.
 
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* Only [[Payment methods|payment methods]] used in Bisq are allowed. Preference should be given to those with immediate payment; Revolut, TransferWise, SEPA Instant, Zelle, Faster Payments etc
 
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* The # buy-bitcoin channel would be moderated.
 
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* Any traders can be removed at the discretion of the channel owner
 
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* No refunds, no mediation, no arbitration, buyer and seller beware
 
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* No DAO compensation requests
 
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= Making an offer to buy BTC =
 
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Once you have access to the #buy-bitcoin channel you can let users know you are looking to buy BTC.
 
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Sellers will then respond to your message letting you know if they would like to trade with you.
 
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Trust and reputation of the seller can be gained from their Keybase links to their socials (Github, Twitter, Reddit etc).
 
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It is important to remember that using trust for the basis of a trade is much different from using Bisq client, which uses code to remove the need for trust.
 
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Buyers of BTC are more at risk then sellers of BTC, as they could be sending their funds to an untrustworthy user. Therefore, buyer beware. Check the person you are thinking of trading with has verified Keybase links to their socials (Github, Twitter, Reddit etc). Verification of these can be seen by green ticks.
 
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If a user does not have green ticks or any social proofs then this should be considered a red flag, and you may want to reconsider the trade.
 
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If a user has green ticks, but only very recently set up profiles, this should also be considered a red flag, and you may want to reconsider the trade.
 
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Trust and reputation of the buyers is less of an issue for sellers are choosing who to trade with and what payment methods to use. Sellers also reduce their risk by charging a premium.
 

Revision as of 01:17, 23 April 2021

To help new Bisq users who don't already have enough bitcoin to use Bisq, there is an informal market for small BTC trades.

Trades take place on the #buy-bitcoin channel in the Bisq Keybase team.

This article covers benefits, risks, and rules to be aware of when using this informal BTC marketplace.

Warn
 This marketplace takes the form of a Keybase chat channel, so trades are NOT secured by any of the security mechanisms of Bisq software (e.g. multi-signature escrows, mediation, arbitration, DAO, etc).

Therefore be aware that such trading is inherently risky.

Background

For new users, Bisq requires ~0.002 BTC for traders to make their first trade:

  • 0.001 BTC security deposit
  • 0.001 BTC miner fees and trade fees

It can be difficult for new bitcoiners to acquire this bitcoin, so this requirement is often a barrier for new Bisq users. The #buy-bitcoin channel offers one possible way to get this initial bitcoin without having signing up for a centralized exchange.

Other solutions are listed here.

Risks

Risks of using the #buy-bitcoin channel:

  • Not entirely anonymous - Keybase is a centralized service that probably logs IP address and other usage metrics that may reveal your identity
  • Must trust traders - Keybase trades are not secured by deposits as they are on Bisq
  • No dispute resolution - Keybase trades depend solely on user reputation, so there's no recourse if something goes wrong

Make sure you understand these risks before trading on #buy-bitcoin.

Trading rules

To maximize the chances that trades go smoothly, the following rules apply to trades in the #buy-bitcoin channel:

  • Maximum trade size is 0.002 BTC. BTC buyers can buy a maximum of 0.002 BTC in one transaction. BTC sellers can sell a maximum of 0.002 BTC in one transaction.
  • Traders can negotiate their prices. Sellers of BTC will likely charge a premium of 15% over the market price for their bitcoin to cover mining fees, time, and profit. Expect different sellers to charge different amounts.
  • BTC buyers should post on the #buy-bitcoin channel the amount they are looking to buy, the payment method they are looking to use, and which currency they wish to make payment in: for example, "I am looking to buy 0.007 BTC with GBP using Revolut. Is anyone online willing to take this offer?"
  • Trades between interested parties can be negotiated and settled in direct messages.
  • Only payment methods used in Bisq are allowed. Preference should be given to those with immediate payment: e.g. Revolut, TransferWise, SEPA Instant, Zelle, Faster Payments etc.
  • Any trader can be kicked out of the channel at the discretion of the channel owner
  • There are no refunds, no mediation, no arbitration, and no dispute resolution of any kind available. Beware!
  • DAO compensation requests or reimbursement requests related to such trades are not allowed.

The #buy-bitcoin channel is moderated to preclude foul play and bad actors.

Advice

Consider evaluating the reputation of sellers in the #buy-bitcoin channel by checking out the links (Github, Twitter, Reddit etc) listed on their Keybase profile. Just note that profiles that appear strong are not guarantees that trades will go successfully.

  • A user without verified links on their profile should be considered a red flag.
  • A user with verified links, but with profiles that were only recently set up, should also be considered a red flag.

BTC buyers take on more risk than BTC sellers, since they could be sending funds to an untrustworthy user.

Although BTC sellers take on less risk, relatively speaking, they should strive to use payment methods with the lowest possible chargeback risk.

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