An arbitrator is the person who find the solution to a dispute that may occur during a trade. Bisq’s arbitrators must pay a BSQ bond, which ensure fair evaluations and prevent collusion with traders.
Initially, traders make a list of arbitrators they approve. When a new trade is initiated, an arbitrator is randomly selected from among the traders’ overlapping, approved selections. The more arbitrators a trader accepts, the more trades will be available to him.
If trader A fails to confirm the receipt of a national currency transfer within the allotted time (e.g. six days for SEPA, four days for Zelle, one day for altcoins, etc.), a button to contact the arbitrator will appear to both traders. Trader B will
then be able to submit evidence to the arbitrator that he did, in fact, send the national currency. Alternatively, if trader B never sent the national currency, trader A will be able to submit evidence to the arbitrator that the funds were never received.
Submitted evidence should be cryptographically secure using either
PageSigner or digitally-signed bank statements. If these methods fail, more traditional routes of discovery can be deployed.
From our experience the huge majority of cases are caused not by any
malicious intention but by problems like network issues, bugs, bank issues, usability, etc.
The arbitrator will side with buyer or seller and sign the 2-of-3 multisignature address in favor of the appropriate party.
As outlined above, arbitrators must lock in a high BSQ bond to become such – much higher than the trade limit. If an arbitrator’s dispute resolution is not agreed to by both traders, they can request confiscation of the arbitrators BSQ bond.
If collusion is found to have taken place, the misbehaving arbitrator will lose her BSQ bond. This puts the arbitrator at a significant loss, as her BSQ bond was much more than she made by being dishonest.
We only support payment methods in which chargeback is not easy (i.e. we don’t support Paypal or credit cards). But there is still certain chargeback risk with banks. If a bank executes a chargeback after the BTC has been released, there is nothing
the arbitrator can do.
Bisq’s goal is to make this scenario as unattractive as possible, using three primary mechanisms:
1. There is a trade limit per trade, which is generally too small to attract criminals.
2. We will remove national currency payment methods which are found to be used for chargebacks.
3. We introduce with version 0.6.0 a new feature for detecting the age when a payment account has been set up. Recently opened accounts
will have lower trade limits. This adds protection against stolen-bank-account-scams.
Pure reputation without the option of arbitration is a weak protection system, as you can never avoid
long con attacks.
It is also problematic for protecting privacy and apply it in a decentralized way.
Can I be an arbitrator?
The required BSQ bond is very high and there are currently only very few people who have contributed that much to Bisq that they have earned so much BSQ. But as soon the full DOA is released and more people have allocated higher amounts of BSQ it will be open to anyone.
Can I contact my trading peer?
Bisq intentionally does not offer a way to get in direct contact with the trading peer. The security mechanisms does not require any direct contact (other than on reputation based systems like Localbitcoins) and we feel that by offering such a feature we might easily open a can of worms. E.g. malicious users could try to trick the peer into a direct trade without using Bisq and then exploit the lack of security or they use the direct channel for other fraudulent activities (social engineering scams, spam,...). For any problems users can open a dispute and the arbitrator will take care to resolve the issue. Beside that they can use the Bisq forum if they need help or for getting questions answered.