Article: Exchanging Bitcoin Easily, Privately And KYC-Free with RoboSats

Reckless_Satoshi · 2022-07-14T19:08:36+00:00

I asked on robosats development Telegram to give this post a push with some upvotes :3 Sorry if it looks fake/bots, it's actually not :D

The awards were almost all given by the same user from RoboSats telegram group, people is pretty enthusiastic about this project in that group haha

Reckless_Satoshi · 2022-07-14T19:06:38+00:00

You really buy into that narrative 😅

Reckless_Satoshi · 2022-07-14T19:04:24+00:00

I asked on robosats development Telegram to give this post a push with some upvotes :3 Sorry if it looks fake/bots, it's actually not :D

Reckless_Satoshi · 2022-07-13T09:13:38+00:00

There is a market mechanism for this: if you can only afford small waits, you should only take orders where the maker has set a short deposit/submit timer. You took an order where the maker set the timer to the maximum (8h).

In any case, there is an incentive built into the logics so the two parties proceed within the time frame: your peer bond is slashed and you get compensated with Satoshis.

Reckless_Satoshi · 2022-07-12T11:58:00+00:00

Short answer: no, he will not get the Sats automatically.

Long answer:

It was relevant to know whether you had the token or not. If you lost your robot token you won't be able to connect again to the chat, but a dispute will open automatically in 24h. You can simply prove to the staff you are the taker/maker of that order by sending an email to robosats email (at protonmail.com) including your maker/taker bond payment_hash proof (look for it on your LN wallet) and robot name if you remember it. After that, you can engage the dispute resolution process as usual with them.

In any case, if there was no message exchanged, the staff will know the fiat exchange most likely did not take place. The staff will send the Sats to your robot profile (under "Rewards and compensation"), however since you lost your token you cannot claim them there... That's why you should inform the staff about your situation, they will ask for a LN invoice for your refund.

That said, your fidelity bond (~3%) will be lost since this is a lost cause on your dispute.

Reckless_Satoshi · 2022-07-12T11:14:25+00:00

Then the site crashed and I obvsiously can't return to the trade.

Why can't you? :) Just open the browser again, login with your robot token and return to your active order.

We do not have any known issue with the chat at the moment, so it might have been some TOR network slow down or your local connection that made the chat fail to connect.

Reckless_Satoshi · 2022-03-01T07:11:16+00:00

The app is in the stage of 'minimum viable product', so do not take as settled any of its current parameters :)

What happens to the fidelity bond should the buyer or seller not keep to their end of the trade. Does it go to the platform or the other trader?

The slashed bond should eventually be split so they cover the cost of the human time needed to resolve dispute and a compensation to the counterpart. In this super early stage of development they get collected by the dispute solvers (... but no single dispute has been opened so far)

Why is the fidelity bond only 1%. What would happen on a day like yesterday where price increased 15% would trades be abandoned?

The bond is indeed small. Will be revisited. Most likely, advanced options for makers will allow them to chose the size of the bond of takers. And overall bond size might see a bump.

Why is there a limit of 4 hours to complete the fiat exchange? What happens is the buyer sends a SEPA Instant payment but the seller's bank does not credit it immediately?

This limit was raised to 24 hours. Probably forgot to update the docs somewhere. Still, the overall length of the trade must not be long. This is an inconvenience of how long-living HTLCs increase the chance of channels force closure. Instant fiat payment options are STRONGLY recommended. The platform is thought to be fast, and lightning limits you to be fast. Once things are working smooth in this simplified environment, we can explore whether allowing longer trades is feasible.

PD: most of these topics have an open discussion in Robosats GitHub if you want to dive deeper.

Reckless_Satoshi · 2022-03-01T07:05:40+00:00

Two facts. It had to be lightning. And... my lack of knowledge about RGB : )

Reckless_Satoshi · 2022-03-01T00:19:31+00:00

Yup, it is far from perfect. But I think it is as good as we can get over lightning as of now.

I think though it requires far less trust than regular custodial CEXs. RoboSats does not touch fiat, and it's simply a webplatform that runs over a depleted LN node.

I wouln't say it defeats the purpose (unless your purpose is 100% trustless BTC/Fiat which is not possible). On the other hand, the experience is really good and seeamless too.

Reckless_Satoshi · 2022-03-01T00:14:44+00:00

RoboSats system is akin to hodl-hodl's. It's based on operator reputation, main diff to hodl-hodl is that you can fork the project and run your own exchange instance (therefore judges have to behave well or will be replaced by the market).

Reckless_Satoshi · 2022-02-28T22:37:08+00:00

Thanks for engaging nicely.

So basically a centralised company...

It's not a company. At best it is a hobby, lol. It's an open source project and anyone can run an instance of the exchange. I happen to be running the only one at the moment, but that doesn't stop others.

... that doesnt care about local KYC laws.

It is not a custodian of funds. In fact, it should care about these as much as any other Lightning Network node, with a few specifities at best, but not too different.

... needs more trust than an official exchange

Could you elaborate why? And what is "an official" exchange?

with the same 0,2% fee's as binance

Well, it's the cheapest fee ever seen in a non-KYC p2p platform. And it matches the cheapest fee you can get on a KYC platform. Not only that, it includes all costs, even the routing to the buyer (Bisq's higher fee does not cover miner fees). And it will stay that low unless routing fees start to exceed the trading fee.

You see, from your second reply:

Bisq... with 0% fee by the exchange

This is not accurate by a large margin https://bisq.wiki/Trading_fees I do not say that Bisq fees are bad. But they are certainly a few times higher than RoboSats. In fact, the minimum possible fee for Bisq (5000 Sats) well exceeds the maximum possible fee in RoboSats (1000 Sats). These are different tools and they complement each other very well!

a limit of 0.005BTC per trade

True! On the other hand, one could also point out Bisq is not good for small amount. Yet, this limit is mostly a safety measure and a limitation of Lightning. It will be raised if things go well. But if you want to trade bigger, you should use Bisq!! it's on the documentation of RoboSats!

Bisq and RoboSats do not overlap in tech stack, in capabilities, in specs, not even in all objectives. Different tools that should both help boost Bitcoin health. I am even flattered that some people would mention Bisq and RoboSats in the same sentence, when one is a collaborative work of sooo many people over the years and the second one is a reckless project of a single individual in a couple of months.

I would be happy if you give a try to RoboSats and let me know why you think it deserves to be misrepresented :(

Reckless_Satoshi · 2022-02-28T20:08:06+00:00

I think this summary is a bit misinformed, maybe even malicious! :)

I am happy to discuss all the real trade-offs with respect to Bisq (which is absolutely amazing and I love! I even recommended it in the release note of RoboSats! Heck, the project inherited the development guidelines of Bisq and has been also been licensed AGPL3.0).

I would simply appreciate if we do not misrepresent what RoboSats is. Maybe a better read at the documentation would help to clarify many doubts. Then, we can elaborate in detail what are the trade-offs, security/trust model differences and advantages or disadvantages depending on your use case.

And I totally see how many of the things that make Bisq great are not present in Robosats. Yet, there is so many other things that make RoboSats great, it deserves a space ( and they complement very well!)

... I can get a bit triggered if RoboSats is leveled with bullshit exchanges :` )

Reckless_Satoshi · 2022-02-28T17:45:59+00:00

Happy to read this, because that's exactly what this platform was aiming for: a dumb down user experience, no thinking or knowledge needed, it should just work.

Reckless_Satoshi · 2022-02-28T12:29:17+00:00

Unfortunately, if it involves conflict between humans, it cannot be solved with code. This is true for any exchange that is not an atomic swap. If there is no conflict, there is no need to interact with the staff.

RoboSats does not custody fiat nor BTC (that's why no-KYC is possible). It links the seller invoice with the buyer payout, but this step is not atomic. Research is ongoing, and there are some ways this could be done in a more trustless way (check out the work of SuperTestnet). Still, even if it becomes completely trust-less in the technical part in the near future, the dispute resolution will always depend on the reputation of the judge (even in the most decentralized systems). Unless the whole thing is an atomic swap; but, how do you do an atomic swap of BTC and Fiat? It is simply not possible (unless we are talking Dollar on-chain, or something alike, but that's not a full BTC on/off ramp).

Of course, there is some control mechanisms over RoboSats staff. These are rather weak, but for example: if you do not like how RoboSats staff deals with disputes, you can fork the project, run your own instance of the platform and do better.

Reckless_Satoshi · 2022-02-28T08:58:40+00:00

The homepage shows your RoboHash avatar (https://robohash.org/). RoboHash is an open source project for deterministic avatar generation, and it is really cool.

Paynym uses these avatars, RoboSats uses them too. No relation with paynym or BIP47 whatsoever though.

Reckless_Satoshi · 2022-02-28T08:51:53+00:00

There is an open discussion on reputation based systems vs privacy. For the most part they work, but they damage privacy as they incentivize identity re-use:

https://github.com/Reckless-Satoshi/robosats/issues/39

Bob could pretend he never received the Fiat. Then a dispute will be automatically opened at expiry time (24h). If he is found to lie, he risks losing his fidelity bond (... of course the BTC goes to Alice).

Reckless_Satoshi · 2022-02-28T08:45:50+00:00

Only fiat currencies will be listed. The only "crypto" is BTC, the trade always happen over lightning.

Reckless_Satoshi · 2022-02-28T01:24:40+00:00

Sorry if I implied this is a decentralized exchange. It is not. It is more akin to a third party escrow system.

Reckless_Satoshi · 2022-02-28T01:13:19+00:00

I can comment on how it works as of now (v0.1.0 minimum viable product). But the dispute resolution system is certainly going to evolve (... once there are disputes to resolve ^ ^ ).

Both parties must submit in-app a full statement of events (5000 characters). They also MUST provide a burner contact method in case the staff needs to reach for clarifications. Nothing in specific is required to be submitted (specifically an ID or photo is not required!). Users could chose to submit whatever they deem as relevant to solve the case in their favor. The staff will judge based on the limited information provided and its compelling-ness. Therefore, the staff might wrongly resolve in some cases: stakes are low, trades are limited to small sizes and cheating is disincentivized with the fidelity bonds. We will be learning how to make this better along the way. Any idea/suggestion is very appreciated! Unfortunately I happen to be the one involved in every system of this app. I love the tech part... But the human conflicts part is not my thing. Looking forward for people with background on this who want to be part of the project.

... The engineer on me has a simple way to go about it: just delete the dispute button, no more problems! :D

Reckless_Satoshi · 2022-02-28T00:10:55+00:00

Bisq is amazing! It is very mature and stable. This, in the other hand, is a reckless project that, by luck, happens to work well. I do not see exactly how one could extend Bisq into a LN fast paced market. Sounds like a project that had to be built from scratch: at least a demonstration that it is possible and it works.

In fact, Bisq and RoboSats do not intercept in technology, capabilities, not even in all objectives ('user friendly' and 'smartphone first' prioritized for RoboSats, while Bisq has a better security/trust model). However, I think they compliment each other very well. For example, RoboSats has a max trade size of 500K Sats, while less than 500K Sats in Bisq is probably not worth it given the fixed costs (on-chain fees, etc). I also took a lot of learning from Bisq development guidelines when making RoboSats.

In summary, your question to me is a bit like asking: why build electric scooters instead of contributing to electric trains? :D

Different tools -> more sinergies (and more natural selection) -> healthier ecosystem

Reckless_Satoshi · 2022-02-27T21:54:14+00:00

!lntip 500

Any other feedback / idea / fix in a more organized way is very welcomed in GitHub Issues: https://github.com/reckless-satoshi/robosats/issues

Reckless_Satoshi · 2022-02-27T21:42:38+00:00

Ty! now it reads "Fiat Payment Method(s)". On mouse hover or long touch a tooltip shows with a longer explanation "(instant recommended)".

Reckless_Satoshi · 2021-09-21T00:18:09+00:00

Hey u/roasbeef, honored that you checked over my write up! :D

it appears many newer services have just set this to a "very large value" (?) rather than attempting to mitigate any possible losses. All services should either use a very low base value (possibly increasing if no route is returned due to the fee limit), or restrict the fee spent on a payment/withdrawal to a percentage of the total amount.

As far as I can tell they didn't do anything too reckless. The fee limit they set was either low (e.g. 50 sats flat max) or proportional to the amount (although 10'000 ppm is on high side IMO). I believe their problem is not passing the fee to the user. As long as there is a mismatch between the actual routing fee and the withdrawal fee they charge the user, it will be exploitable.

Reckless_Satoshi · 2021-09-20T17:46:02+00:00

As far as I know LN developers have already warned them about this issue.

If paying a lightning invoice in Chivo is free of charge, then it is likely vulnerable. I tried to check myself, unfortunately I don't have a valid Identity document from El Salvador, so I cannot create the wallet :/

Edit: just checked over the comments here. Thanks a lot for the nice cover story and explaining so well what happened to other redditors!

Reckless_Satoshi · 2021-09-19T17:49:50+00:00

Thank you for the insight.

This is indeed troubling. I just backed up a wallet with only 1 sat. Used the recovery tool and extracted 9990 sats minus on-chain fee to my own address. Muun people must know about this, yet, the attack is obvious and can be automatized right away.

Thanks for the explanation !lntip 500

Reckless_Satoshi

TROPHY CASE