On Bisq, arbitrators determine solutions to trade disputes. Arbitrators must pay a very high BSQ bond, which ensures fair evaluations and prevents collusion with traders.
Arbitrators are chosen randomly for each trade.
If trader A fails to confirm the receipt of a national currency transfer within the allotted time, a button to contact the arbitrator will appear to both traders. Trader B can then 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 can 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 employed.
In our experience the vast majority of disputes are not caused by malicious intention, but by minor problems like network issues, bugs, bank issues, usability, etc.
Once the arbitrator has clarified the situation, they will sign the 2-of-3 multisignature address in favor of the appropriate party.
As mentioned above, arbitrators must lock in a high BSQ bond to become arbitrators in the first place–much higher than the trade limit. If both traders disagree with an arbitrator's resolution, they can request confiscation of the arbitrators BSQ bond.
If collusion is found to have taken place, the misbehaving arbitrator will lose their BSQ bond. This puts the arbitrator at a significant loss, as their BSQ bond was much more than they made by being dishonest.
Bisq only supports payment methods for which chargebacks are not easy (e.g., this is why PayPal and credit cards are not supported). But there is still a little chargeback risk with banks. If a bank executes a chargeback after the BTC has been released, there is nothing an arbitrator can do.
Bisq's goal is to make this scenario as unattractive as possible, using three primary mechanisms:
- There is a trade limit per trade, which is generally too small to attract criminals.
- National currency payment methods which are found to be used for chargebacks are quickly removed.
- With version 0.6.0, a new account-aging feature was added. This feature enables fiat accounts recently added to Bisq to have lower trade limits, and those limits are increased over time. 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 sybil or long con attacks.
Such mechanisms are also problematic for protecting privacy and for keeping the service decentralized.
The required BSQ bond is very high and there are currently only very few people who have contributed enough to Bisq to have have earned so much BSQ.
So far, Bisq has intentionally avoided offering a way to get in direct contact with the trading peer. There is generally no need for such a mechanism, and offering one would only open a 'can of worms' with respect to security: malicious users could trick peers into a direct trade without using Bisq, and then exploit the lack of security to rip the other person off, or use the direct channel for other fraudulent activities (social engineering scams, spam, etc).
Instead, in case of any issues, users can open a dispute and resolve the issue with the help of an arbitrator. There is also the Bisq forum and Slack channel available for users to get help.
Note: with the launch of the new trade protocol, however, there will be a means for peers to directly communicate with one another.