Informal Market for Small BTC Trades
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.
You can see the Git Hub proposal here: https://github.com/bisq-network/proposals/issues/283
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.
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.
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:
Background - why #buy-bitcoin exists
For new users of the platform Bisq requires approximately 0.002 BTC for traders to make their first trade.
This is made up of:
- 0.001 BTC Security deposit
- 0.001 BTC Miner and Trade fees
New users of Bisq that have no Bitcoin often ask in Bisq channels how they can acquire their first Bitcoin to start trading.
- Buy-bitcoin has been set up to help new Bitcoiners get their first Bitcoin so they can start to use Bisq.
Other recommended ways to get your first Bitcoin if you do not want to use #buy-bitcoin are:
- Find a friend that has some BTC you can purchase from them.
- Find a Bitcoin ATM local to you that you can exchange your fiat for BTC.
- Purchase a small amount from a centralized exchange (this will require you to give ID information to the exchange).
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).
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.
- Buy-bitcoin is a way to make a BTC purchase without KYC.
Benefits to new traders with no Bitcoin
The benefits #buy-bitcoin provides to new traders with no BTC is the following:
- Semi Private.
- Semi Anonymous.
- No KYC required.
- A quick and easy way to get their first BTC in a person to person (P2P) manner.
- Chance to get early access to the Bisq community.
- Opportunity to start their BTC journey getting familiar with Keybase.
Keybase is a fantastic resource for Bisq users. Bisq wants traders first experiences of Bisq to be positive and Keybase helps to achieve this.
Risks to users trading using #buy-bitcoin
The risks to user using #buy-bitcoin to purchase Bitcoin are the following:
- Only semi Private.
- Only semi Anonymous.
- 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.
- Reputation damage for traders if trades go wrong.
- No mediation if things go wrong for traders.
Traders should ensure they are aware of the risks when using #buy-bitcoin to purchase Bitcoin.
Creating a Keybase account
To access #buy-bitcoin on Bisq you will first need to create a Keybase account and join the Bisq Keybase team.
You can access Keybase on multiple devices. Once you have joined the Bisq Keybase team you will need to join the #buy-bitcoin channel.
Keybase is pretty easy to use once you have the hand of it. For helpful information about the Keybase features see the Keybase Book for a guide to using Keybase.
#Buy-bitcoin Trading Rules
To increase the chance of trades going smoothly. #buy-bitcoin has the following trading rules that all buyers and sellers must adhere to.
- 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.
- 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.
- 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".
- Trades between interested parties can be taken to DMs negotiated and completed.
- Only payment methods used in Bisq are allowed. Preference should be given to those with immediate payment; Revolut, TransferWise, SEPA Instant, Zelle, Faster Payments etc
- The # buy-bitcoin channel would be moderated.
- Any traders can be removed at the discretion of the channel owner
- No refunds, no mediation, no arbitration, buyer and seller beware
- No DAO compensation requests
Making an offer to buy BTC
Once you have access to the #buy-bitcoin channel you can let users know you are looking to buy BTC.
Sellers will then respond to your message letting you know if they would like to trade with you.
Trust and reputation of the seller can be gained from their Keybase links to their socials (Github, Twitter, Reddit etc).
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.
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.
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.
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.
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.