Posts in the News category

Development update

  • By Manfred Karrer
  • In News
  • On Jun 18th 2015
  • permalink

It was a bit quiet here the last months, but there was going on a lot on the development front.

I have implemented the support for various payment methods (OKPay, SEPA, AliPay, Swish,…) and the arbitration system.
We also have now Altcoins support! So you can change safely and in a decentralized way your Altcoin against Bitcoin.

The arbitration system comes with a complete messaging/chat system so it is integrated to the process in a way that it makes the life for arbitrators and traders as easy as possible in case of a dispute.
I just published a video of the current application showing all those new features.

Stay tuned we are getting closer to the release!



  • By Manfred Karrer
  • In News
  • On Mar 12th 2015
  • permalink

I wanted to give a short update about the project state as things have changed a bit since the last Blog post.

We released v0.1.1 which uses now UpdateFX, so users need to install only once a binary and we can then easily push updates without forcing the user to download and install new binaries.
The P2P network supports now Relay mode so connection problems with UPnP or the need for setting up manual port-forwarding are now gone. Nearly everybody should be able to connect now without hassle.

Alexander Mülli from the University of Zurich is writing his master thesis about Bisq. Looking forward to get the first results.

Thanks to some generous donations (special thanks to Mats-Erik Pistol and Arthur S. Falls and to all others who expressed their support to the project!), I can go on working full-time on the project for at least 3 more months.

Considering the limited financial scope I tried to figure out what would be the most basic version of Bisq which still is secure and fulfills the main principles. I hope that we can release such a fully functional Beta version in the next 3 or 4 months.
The main element which is not included for that reduced version is the decentralized arbitration system but a static arbitrator will be available to solve disputes. The planned communication tools in case of a dispute will be postponed as well. Also the number of payment methods might be more limited as original planned.
If the initial version will already include a Bitcoin-to-Altcoin exchange needs a bit more investigation for the included extra effort, but it is likely that this will be part of the Beta launch.

After that Beta has successfully launched and depending on the feedback and acceptance of the community I will go on working on the full version like it was planned in our roadmap. The unsolved funding problems will remain but there are some ideas to explore and who knows, maybe the bitcoin price will rise and help us as well?

We will need some help for testing the application in a larger group to see how stable the P2P network behaves in real life conditions. We will announce that as soon as we are ready for such a testing session.

Stay tuned and I hope we are getting closer to a fully decentralized Fiat-Bitcoin exchange.


Crowdfunding campaign conclusion

  • By Richard Myers
  • In News
  • On Feb 10th 2015
  • permalink

The Bisq crowdfunding campaign has ended without reaching our funding goal.  We are disappointed, but also proud and encouraged by the amount of the support we did receive.   The enthusiasm we have seen from the community confirms we are on the right track and fuels our own passion to make Bisq a reality.

Although the project will lose the full time efforts of Manfred and Chris, we will continue to move forward with a renewed focus on development with out the distraction of raising money.  We may not be able to deliver milestones on our original schedule now, but we will continue to make progress with the part time volunteer efforts of Manfred and the rest of the team.

In summary, the campaign raised 54,03480061 BTC (45%) of our 120 BTC goal from 55 supporters over the course of 20 days.  Our highest pledges were for 10 and 11,72537 BTC, with the most common pledge being around 0,2 BTC.

We appreciate every pledge, but in particular we would like to thank the community leaders whose public pledges also served as a vote of confidence for what we are doing.  In particular, Mike Hearn (1 BTC), Olivier Janssens (10 BTC) and Arthur Falls (3,03629).

We would also like to thank the members of the bitcoin media who supported our campaign by writing or podcasting about the project.  We encourage you to read or listen to the links on our press page and pass them on to your friends and followers.  We believe there are many in the bitcoin community who share our vision, but do not know about Bisq and would be excited to learn more about how a truly decentralized bitcoin exchange is becoming a reality.

Lessons Learned

Overall our experiment using Lighthouse for crowd funding was a great success.   The technology works well and we feel overall it enhanced our ability to attract pledges.

That said, there are some lessons learned that we will share.  We had a few comments that our minimum pledge amount was too high.   We would have preferred a lower amount also, but due to a technical limitation of bitcoin we set it as low as we could.  In retrospect, we might have benefited from a lower minimum pledge but ultimately it is unlikely to have changed the outcome of our campaign.

Another lesson learned is that if we had run our campaign longer the publicity about our project might have reached more people.  Unfortunately our full time developers were already well past their financial limits before Lighthouse was available so our only option was an aggressively short campaign.

We will not forget our supporters and look forward to validating your confidence in us.   Please get in touch if you can  contribute some time to the project for development or testing.

You will need to revoke your Bisq pledge from within Lighthouse, but we encourage you to investigate the many other worthy projects using Lighthouse, especially those that support decentralization and core bitcoin development.

Thank you from all of us on the Bisq team!


Reality check

  • By Manfred Karrer
  • In News
  • On Jan 22nd 2015
  • permalink

We are glad to announce that we have started our new approach to iteratively fund the development of our project using Lighthouse. Please find all details about our campaign at the crowdfunding section on our webpage.

In this article I would like to discuss the reasons why we have chosen that model.

To make sure that such a project will work in a fully decentralized way, we are challenged by several constraints – all leading to a single axiom: No single point of failure

How to avoid single points of failure?

While the overall technical and conceptual requirements of Bisq can be found in our whitepaper, the focus of this post is only the aspects related to our funding model.

A project starts with the people behind the project and the organizational form they use.
Projects like Napster, ecash or Liberty Reserve, although different in many aspects, have taught us an important lesson: A company behind the project is a single weak point for bringing the whole project down.

Bisq is a community centered project. We are not a startup and there is no investor demanding a return of investment or guiding our decisions. In the long term Bisq is aiming to convert into a DAO (sorry for the buzzword), but we first need the technology available for building DAOs to mature.

A further requirement for avoiding single points of failure is that the code follows free and open source software principles, so that even if the project in its current form failed, anyone else could continue to develop it.

It is important for us to stay within the legal framework because legal pressure is likely to happen and might bring down the project easily. And yes, we don’t like jails :-).
To run such a project with anonymous identities might be an alluring option, but we decided against operating anonymously for various reasons.

Where are we now?

We published our first alpha version funding the development with our own savings and managed to built up a small community of supporters and contributors.

The strategy to fund development with our own financial resources has met its limitations and therefore we need to reach out for other possibilities.
We decided to use an iterative crowdfunding model with Lighthouse for pushing the project towards a fully functional version 1.0.

Such a model comes with some difficulties:
It is not easy today to get attention in the bitcoin media space.
There is a huge competition for getting the signal above all the noise. We don’t have any marketing budget for hiring PR professionals and it wouldn’t fit into our philosophy and style as well. We have limited time ourselves and already spent way too much time on those non-development tasks!
So we are highly dependent on our community to support us in our marketing and communication efforts.

The iterative approach does not give us any security for the next funding rounds and it is hard to keep developers in such an uncertain environment. To be in competition with companies in an emerging market like bitcoin, that offer equity and high compensation to key developers, does not make the situation easier. To find and keep developers for open source projects which are struggling to just pay the basic living expenses, seems already to be an incredible difficult task.

We’re not claiming that our approach is the golden solution, it is just the best that we could come up with after much time of debating and considering and the one which aligns cleanest to our initial motivation why we started to build such kind of project.

What are the alternatives?

Some people have mentioned that a model where users are able to invest in Bisq would gain more attention.
That is certainly true but comes with a few difficulties: One basic restriction is that we are committed to stay in the legal framework, so any model which might be interpreted as IPO is outside of our considerations. Also as soon as we are taking money directly from the exchange (e.g. by taking fees) we would trigger licence issues as it could be interpreted in the way that we are operating the exchange.  A more fundamental problem with an investment model is that anyone who invests in Bisq would expect to own something, which creates either a centralization or forking risk.

Lets have a look at some alternative models:

Using an App coin
That approach might be the right solution for the right project. Unfortunately we have already proven that Bisq is working fine without an app coin. So introducing an app coin with the sole purpose for funding would immediately provoke a fork.

Voting shares DAO
A model similar to NuShares is interesting and might be a future alternative. Unfortunately it is not trivial and comes with considerable effort to build or adjust the infrastructure needed for such a solution. Once Ethereum is out we might reconsider how we could turn Bisq into a DAO.

Find another alt coin or platform which is interested in sponsoring the project
A P2P exchange is an important infrastructure for any platform.
New emerging platforms might be interested in sponsoring our project to have the possibility that people can trade their currency against a national currency without the intermediary of bitcoin.
One concern is the extra effort to move to another technology. Also bitcoin is still the most relevant crypto currency today. But to expand to other currencies is definitely a topic we will discuss after our v1.0 release.

It’s not easy

It seems the funding opportunities to develop such a project are pretty narrow. Hopefully not too narrow to allow our project to flourish.
We are struggling with a problem not unique to Bisq. The problem of the tragedy of the commons is shared with many other open source projects. A huge number of open source projects fail to come to completion because it is so hard to find adequate funding models. Being not “venture capital shaped” leaves you often without any alternative funding options.
The fact that we deal with money makes the situation more difficult as it introduces additional legal constraints, but it also hold some promise that there might be a solution utilizing the accessibility of bitcoin inside an application.

Open for a reality check

We tried hard to find a funding model which is closely aligned to our constitutional ideas of decentralization. Using that iterative crowdfunding model with Lighthouse seemed to be the best fit. We are aware that it is not easy and we need our community to support our efforts to spread the word and to reach our funding goal.

It is an opportunity for us and for the bitcoin community to evaluate its values, to check where we are and where we are aiming to go. Bitcoin is not just the next PayPal, it has a revolutionary potential and that is the reason why we are in and why we are working hard to make that project a reality.

Committed to Satoshis vision of bitcoin

In times when big banks and Wall Street giants are entering the bitcoin space with investments of 75M USD in exchanges which are representing more or less the opposite of what we are standing for, it is time to act: It is time to bring new infrastructure to bitcoin which is following bitcoins inherent concept of decentralisation and protection of privacy.

It is in our hands whether bitcoin moves more and more into a direction guided by banks and the existing power elite or if we can keep bitcoin as what it originally stood for us early adopters, for that why we initially got excited about bitcoin: To change the world, to help to distribute the overwhelming wealth of the few to the other 99%. To challenge the century old elites of power and help to make them obsolete. To force governments to redefine themselves in a new model, not based on the creation and control of money, but on the purpose of organizing communities to efficiently produce value for all participants.

And when already caught in such a solemn mood, lets finish with our favorite quote:

“To change something build a new model that makes the existing model obsolete”
– Buckminster Fuller


There was recently an important incident in the bitcoin space.

No, I am not talking about what happened at Bitstamp.
Theft is not a systemic risk. All the big bank robberies never threatened the monetary system.
Those companies need to improve their security and even with the best security there will always be left some risk for theft.

What concerned me much more is a case where I might lose my bitcoin not because somebody has stolen it, but because somebody started to destroy bitcoin as money.

Coinbase has (not the first time) caused some concerns as they are tracing coins.
That is a systemic danger much more serious than even the MtGox incident.

Why is this a problem?

Bitcoins anonymity (or better pseudonymity) is based on the assumption that you cannot match an address to the real identity of the person owning it. All bitcoin transactions are connected and you can analyze quite well the flow of the money. As soon as you are able to match addresses to real identities, you are weakening the anonymity potential of bitcoin.
With coin merge you lose even the anonymity of not yet matched coins.

Anonymity is for bitcoin even more important than for national currencies as the block chain is completely public.

Coin tracing gets much worse when the huge majority of bitcoin entry and exit gateways are in the hands of companies which know the real identities behind the addresses.

Imagine a simple example where you purchase 1 bitcoin from Coinbase and then spend that at an online shop which is using Coinbase as bitcoin payment processor. Coinbase has perfect information that you have spent that bitcoin in that particular shop.

If the shop uses another payment processor the information is still accessible for governmental agencies, and after all the Snowden revelations it is valid to assume that they are collecting those data with or without the knowledge and consent of the companies.

In a world where the huge majority of monetary transactions are including at least one company, that leads to a surveillance level which even exceeds the surveillance potential of the fiat system, since cash is at least very hard to track.

If that surveillance potential is not enough to alarm us, lets have a look at further potential results of coin tracing.
If coins which you have received might be at risk of having been used in a criminal activity and the coins are traceable, those coins might not be accepted and therefore lose their value.
That would lead to the situation that you would need to always check if there might be a risk that your bitcoin has become blacklisted.
This would destroy the utility of money as it was already recognized in the 18th century by a scottish court.

Fungibility is an essential property of money and any attack on that would destroy its value.

That is why I am much more concerned about what Coinbase is doing than the hacks at Bitstamp or last year at MtGox.
Nobody could steal my bitcoins if I am not using those companies, but if they are attacking bitcoin’s fungibility, they are attempting to destroy my bitcoins as well.

But how can we be sure that bitcoin companies are not logging and tracing transactions?

Should we simply trust them from some terms of conditions statement?
Should we ask for legal protection and regulation?
You would probably not be in the bitcoin boat if you would rely on models based on trust in legacy systems.
So we need better solutions.

Lets get back to the above example: It is very easy to trace if one company is used as exchange and as payment processor for merchants at the same time. It gets a bit harder to collect meaningful information if there are several companies involved, but for a governmental agency that is also not a hurdle. If they are distributed in different countries it gets a bit harder again, but hacking into foreign countries’ companies is nothing that would cause a headache to the three letter agencies.

Solutions like CoinJoin and merge avoidance are very important tools to improve the anonymity of bitcoin, but we can do even better with decentralizing the important gateways like exchanges and markets.

In a pure P2P economy where monetary transactions are handled in a decentralized manner, everyone acts as both a provider and consumer of goods and services. In this model surveillance would need to be expanded to all participants in order to trace all transactions. That would at least raise the costs of mass surveillance significantly.

A fully P2P economy may not be realistic for various reasons, but it should be clear that decentralized gateways reduce threats to fungibility and therefore help to preserve an essential property of bitcoin as money.


Bisq: Now in Alpha

  • By Chris Beams
  • In News
  • On Dec 16th 2014
  • permalink

After many months of research and development, we’re excited to announce the release of Bisq v0.1. This marks the beginning of our alpha phase and the first major milestone on the road to a fully-functional Bisq v1.0.

What is Bisq?

If you’re reading this, you’ve probably gathered that Bisq is a decentralized bitcoin exchange. Perhaps you’ve watched the explainer video as well. Let’s get a bit more specific, then—Bisq is a system designed to allow people to exchange bitcoin for national currencies, and it’s comprised of three major components:

  1. the Bisq client: a cross-platform, open source, JVM-based desktop application;
  2. the Bisq network: a distributed hash table (DHT) loosely similar to that used in BitTorrent;
  3. the Bisq protocol: a secure approach to trading and arbitration using bitcoin’s built-in multi-signature transaction capabilities.

Together, these components form a peer-to-peer system without centralized control and without single points of failure. That’s what decentralized means to us, and if that description reminds you of bitcoin itself, that’s good, because Bisq was designed to reflect bitcoin’s own principles and philosophy. Simply put, Bisq is built on the idea that individuals should be free to engage in mutually beneficial exchange without sacrificing the privacy of their personal information or the security of the funds being traded.

One way to think about Bisq is to imagine what a Satoshi Square meeting might look like if it were held online—in fact, that’s where the square in Bitsquare comes from. Satoshi Squares happen all over the world, and they’re all about regular people getting together to buy and sell bitcoin in a safe space. And that’s what Bisq is about too. Our primary goal is not to build a highly sophisticated platform for day traders—it’s to build a secure, privacy-respecting, and user-friendly way for everyday people to buy and sell bitcoin from anywhere in the world.

In short, we think the bitcoin ecosystem deserves an exchange option that is as decentralized and robust as bitcoin itself. We hope you do too—and if you do, you probably have many questions about how it all works. The white paper and FAQ are great places to start getting those questions answered. We look forward to diving into all the specifics in future blog posts and videos, but don’t hesitate to reach out and ask questions directly in the meantime.

Who is Bisq?

The Bisq core team is Manfred Karrer, Chris Beams, Steve Myers, Richard Myers and Lloyd Johnson. We’ve been fortunate to have the help of many other contributors along the way, and we’re on the lookout for additional developers and security experts to join us.

Our team members live in the US, Europe and Australia, and have come together to work on Bisq out of mutual passion for bitcoin’s potential and the belief that decentralized exchanges are a critical infrastructural element currently missing from the bitcoin ecosystem.

We are not—and do not intend to become—incorporated as a business of any kind in any jurisdiction. We’re a global group of developers and technologists committed to making Bisq’s decentralized exchange a reality—nothing more, nothing less. To sustain and accelerate our development efforts, we’ll raise money through crowdfunding on a per-milestone basis, starting with our next milestone (v0.2). We’ll be announcing complete details soon; in the meantime, feel free to take a look at our crowdfunding and governance docs.

The road to 1.0

For the last several months, Bisq has been in a pre-alpha state, meaning that while certain use cases for the system have been working for a while already, we hadn’t yet created installers and user guides and everything else necessary for non-developers to simply download and use Bisq. This was primarily because we were occupied with network stability and other fundamental issues that often prevented Bisq from practical use outside the context of development and debugging.

As mentioned above, Bisq is now in alpha with today’s release of version 0.1. This means:

Sounds pretty good so far, right? Well, here’s the alpha part:

  • All bitcoin operations take place on the bitcoin testnet during the alpha phase. This means you can’t trade “real” (mainnet) bitcoins yet, and you’ll need to get test coins from a testnet faucet.
  • Because real bitcoins aren’t being traded, no real national currency is traded either. We recommend “simulating” this step of the protocol with your trading partner via chat or email.
  • Because the project is still young, Bisq’s offer book may be empty at any given time, meaning you may need to seek out a trading partner. You might want to ask a friend or find someone in the #bitsquare-trading IRC channel.
  • Depending on your network configuration and router equipment, you may have issues connecting to the Bisq network. For example, you may need to configure manual port forwarding on your home router.

There are other limitations as well, but hopefully you get the idea—Bisq is working software, but it’s alpha-quality working software. You should expect a few bumps, but we hope you’ll join us for the ride anyway.

We’ve published a roadmap detailing a series of nine milestones on the way to Bisq v1.0. Today we’re releasing v0.1. The next milestone release will (unsurprisingly) be v0.2, and so on. Bisq will keep its alpha designation for as many milestones as necessary until it becomes reasonable to begin testing small trades on the bitcoin mainnet. At that point, we’ll announce that Bisq is in beta, and of course this will mean the start of real national currency trading as well.

Bisq will exit beta with the release of v1.0, which we’re setting a high bar for. To us, v1.0 means that users must be able to expect with a high degree of certainty that their information and funds are safe under any condition or failure mode, and that in the case of a dispute or misunderstanding, Bisq’s decentralized arbitration system is standing by to help. The release of v1.0 will also carry with it certain guarantees about interoperability and compatibility with subsequent versions of the software.

Next steps

Take Bisq for a spin right now if you like—we’d love to hear your feedback. Perhaps you’d like to join us for one of our upcoming Bisq WAN parties, in which we get together in larger groups via IRC and put Bisq through its paces. They’re a great way to get to know the application, the team, and other folks helping to make Bisq a reality. To stay up to date you can subscribe to the blog, newsletter and/or join the Bisq mailing list. In any case, stay tuned—this is just the beginning.


Bisq Website Updated

  • By Lloyd Johnson
  • In News
  • On Oct 26th 2014
  • permalink

new-bitsquare-websiteAs the Bisq Application comes closer to a public Alpha we have been working hard towards updating the Bisq website too. The new website went live as of October 26, 2014.

One of the areas where Bisq needs help is in attracting additional Java developers to help with application development. We hope that the new website makes the project much easier to understand and will encourage people to become involved in the community.

If you are interested in helping to build Bisq then please check out the Community page and become involved! Even if you’re not able to devote much time to Bisq, it would mean the world to us if you would share our updated website on Social Media and Email with your friends and family who might be interested.