When you’re looking at a project or exchange and you’re searching for hints of centralization, often times it comes in the form of centralized servers, and/or a centralized team/network.
Whatever your feelings are about Bitcoin, one thing is undeniable: it has the most secure network.
This is directly due to the huge number and wide distribution of nodes that run and monitor the network. The fact that there is no Bitcoin company, no Bitcoin CEO who has the power to override or destroy the system doesn't hurt either.
Decentralization should be thought of as a spiderweb, the more strings there are to support the web, the better. That way if one or two strings get detached, or damaged, it won’t destroy the entire web.
Even though decentralized exchanges don’t directly hold your cryptocurrencies for you, they can still have other “points of failure”.
I’ll reference EtherDelta again because this is a good example of how any aspect of centralization can be enough to take down a project or exchange. For EtherDelta, it was their web hosting choice that was taken advantage of and exploited by hackers.
And even though IDEX is a great looking and easy to use exchange with a lot of benefits, the fact that this DEX has a very public and social media friendly CEO could also one day spell trouble for it’s future.
I know that many people have a hard time placing trust in a project or exchange if you don’t know who is behind it, especially if they make it a point not to disclose their identities. But knowing someone’s name and seeing their face isn’t everything. In fact, lots of times these aspects are exploited as well and used to gain trust when the project their working on really doesn’t have much going for it.
We don’t know who Satoshi is, but we see what he has built.
If a team or individual makes information completely open source and as decentralized as possible this should far outweigh the fact that you don’t know who is behind it.
This way if you’re suspicious of their intentions, it’s open source, meaning you have every right and ability to go check out their GitHub, go through their code, see their commits, and analyze the structure to determine for yourself if it satisfies your decentralized needs.
The project I’m covering today, Bisq, does just this and I invite you to go through this exchange yourself and see how you feel about their intentions and what they’ve created so far.
View Video Here^^^^
Bisq
A decentralized exchange that does not use a website as it’s interface, instead you’ll need to download the app, or if you’re feeling fancy you can build your own app yourself using the source code they provide. Bisq uses the Tor network to connect to the Bitcoin Mainnet.
You should take a look around this app once it’s installed and get a feel for the layout.
Once you make your way to your account tab, this is where you’ll need to be prepared to backup your Bisq account with a USB drive and also encrypt your seed words using a strong password.
Write your seed words down on a piece of paper and keep them safe along with that USB drive you’re using to back up your account.
The Bisq app itself does a good job of reminding you what you should do to encrypt your seed words and backing up your account so if you follow their instructions you’ll be fine.
Now that your account is all squared away let’s explore the markets.
Bisq has a number of base cryptocurrencies and national currencies you can choose to trade with and there’s also a long list of alt coins to choose from to trade with these base currencies.
You can choose to fill an order that someone else has put out, or you can create your own and wait for it to get filled.
When it comes to trading with your national currency, you’ll be able to fill another person’s trade only if you are also using the same type of account to fund the trade, for example, you’ll both need to be using a Venmo account, or Chase Quick Pay.
If you don’t see an order that matches with your own account type, you’ll need to create an order of your own.
If you want to connect an account to use to purchase cryptocurrencies with your national currency, there’s plenty of choices here.
It’s important to note that the information you provide for trading these national currencies, like your name and email will be shared with whoever you are matched to trade with.
This information is stored locally on your computer so Bisq itself does not have access to it.
You’ll also notice that there will be a limit placed on the value of your trades, this is to protect against chargebacks from your national currency account type.
As your account ages, this limit will increase.
However, there is not a limit on how many trades you can do.
I’m sure you’ve got more questions about how this exchange works and how to get your favorite alt coins added to it, so I’m going to suggest checking out their FAQ page, you can find links to all of this information down in the description of this video.