Informal Market for Small BTC Trades

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Revision as of 01:17, 23 April 2021 by Plebeian9000 (talk | contribs) (streamline)
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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.

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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