On August 20th, peer-to-peer exchange platform Bisq shared it had processed its 70,000th trade, after facilitating 20,000 trades in the previous six months.
Bisq processes crypto-to-fiat and crypto-to-crypto trades without a third party. Bisq’s official GitHub page describes the protocol as “a safe, private and decentralized way to exchange bitcoin for national currencies and other digital assets.” The platform facilitates peer-to-peer trades through a 2-of-2 multisig escrow process with a human arbitration system for dispute resolution.
Compared to centralized exchanges, peer-to-peer trading platforms process a fraction of the global Bitcoin trading volume. Industry leader Binance processed a volume of 1.5 million bitcoin in July - solely for its Bitcoin-to-Tether pair. Bisq, in comparison, recorded a trading volume of 385.48 bitcoin total during the same timeframe.
Other than most centralized exchanges, Bisq does not automatically match orders; instead, users manually select offers from the platform. By design, Bisq is therefore more suited for occasional bitcoin purchases or sales, as opposed to centralized exchanges which are the preferred destination for traders.
Commenting on its Milestone, Bisq said:
“Bisq hit 70,000 trades all-time yesterday. This, just 6 months after hitting 50,000. Says a little something about the pace of the network's growth... Question though, why do you yanks charge so much of a premium on your bitcoin? EUR much more friendly”
The term non-custodial refers to a system that does not require the user to entrust a third party with their private keys. Other than centralized exchanges, Bisq does not hold its users’ private keys and therefore has no access to their funds.
In August, traders on Bisq noted that several crypto-to-fiat trading pairs were seeing increased liquidity on the platform. A pseudonymous trader noted:
“Bisq Bitcoin DEX GBP/BTC volumes rise. The British Pound has actually become a liquid market on Bisq. And thanks to UK Faster Payments it is faster to trade on Bisq than to use a centralized exchange.”
Overall, growth in the non-custodial Bitcoin exchange market is a positive factor for the long-term growth of the Bitcoin ecosystem. Peer-to-peer platforms reduce counterparty risks and allow users to minimize reliance on third parties. Still, the volume of peer-to-peer exchanges remains far behind that of centralized alternatives, indicating that platforms like Bisq currently serve a niche market of cryptocurrency holders with a preference for financial privacy.