In the past, accessing Bitcoin was complicated, but that reality has changed. Over time, numerous methods for buying Bitcoin have emerged, including through exchanges, P2P transactions, digital accounts, and even major banks.
Many of these on-ramps, or entry points for Bitcoin, require KYC (Know Your Customer) compliance.
But what exactly is KYC?
KYC involves providing data to the platform to register and perform transactions with Bitcoin, such as your name, address, phone number, email, and often even proof of income.
However, this requirement has frustrated many bitcoiners who prioritize privacy. That’s why new solutions like Robosats are emerging.
In this article, you’ll learn about Robosats, a P2P exchange dedicated to privacy in Bitcoin transactions on the Lightning Network.
Additionally, we will guide you through a step-by-step process on how to purchase Bitcoin privately and securely using this platform.
Let’s get started!
What is Robosats?
Robosats is an open-source, peer-to-peer (P2P) platform that enables the buying and selling of bitcoins using the Lightning Network.
P2P stands for “Peer-to-Peer,” meaning point-to-point or “person-to-person.” Thus, P2P transactions are those made directly between individuals without needing a third-party intermediary.
Essentially, P2P platforms connect buyers and sellers directly. Therefore, at no point does a P2P platform store funds or receive fiat money in exchange for Bitcoin. Instead, they simply facilitate the interaction between two parties to negotiate directly.
Additionally, since a P2P platform doesn’t hold your balance, you receive the value directly into your wallet. This eliminates the need to transfer your satoshis from the platform to your wallet, thereby avoiding potential withdrawal fees.
Robosats is a P2P marketplace that allows users to trade Bitcoin directly with others from anywhere in the world. However, it’s important to note that P2P services may have higher buying and selling fees compared to traditional methods, such as exchanges.
To use Robosats, no personal information is required during registration, and access is only through the Tor browser to ensure privacy.
But, don’t worry; we’ll guide you on how to use the tool practically later in this article.
Using the Lightning Network
Since Robosats leverages the Lightning Network—a second-layer solution built on top of Bitcoin—transactions between users can be completed in as little as five minutes, provided both parties are online.
Additionally, Robosats is a global platform that connects users from different countries and accepts virtually all fiat currencies and payment methods.
Privacy with ‘Robots’
Robosats, short for “Robotic Satoshis,” derives its name from its privacy features. When you create an account on the platform, you’re assigned a robot avatar and a random name.
You can generate a new robot avatar whenever you like, and it’s recommended to do so to protect your privacy, as reusing robots can compromise it.
Upon registering, a robot is generated along with a unique token. This token acts as a password, allowing you to access ongoing orders or active disputes (which we’ll explain shortly).
Therefore, in summary, it’s advisable not to reuse robots, and your token should only be used to recover your current robot if you have any ongoing operations.
Key Features of Robosats
Robosats is built on three main pillars: privacy, speed, and security.
Let’s explore each of these!
Privacy
Privacy is a foundational pillar of Robosats, integrated into all of its functionalities by default. The platform’s design and access methods are crafted to reinforce this principle.
To ensure robust privacy, Robosats adopts four main mechanisms:
- No Data Registration: When accessing Robosats’ site, no email or other information is required for registration. Additionally, pseudonymous robots are your identity on the platform, and there is no way they can be linked to your real identity.
- Encrypted Communication with Auditable PGP: Each robot receives a PGP key to encrypt end-to-end communication, which you can easily verify in any PGP application. During negotiation, an encrypted chat between the two parties is initiated on the platform.
- Use of the Tor Network: Access to Robosats is only possible through the Tor browser, ensuring that your IP is not shared with network nodes or your trading partners.
- Multiple Identities: Robosats encourages the use of different identities (robots) for each transaction, maximizing user privacy. This feature is unique to this platform.
Speed
Another main feature of Robosats is speed. Since the platform is based on the Lightning Network, all transactions are conducted on this second-layer Bitcoin network.
The Lightning Network is not only faster but also incurs lower fees, enabling users to complete trades swiftly—often within just five minutes, assuming both parties are online.
Additionally, the absence of a personal registration approval process allows for rapid access to the trading panel. Users can quickly find a trading pair and begin negotiations.
Security
As mentioned in the privacy section, Robosats employs various mechanisms that enhance not just privacy but also security for its users.
Transactions are conducted directly between two users, minimizing the risks associated with third-party interference. However, to protect against potential malicious actions by a user, Robosats implements a security feature.
So, before any negotiation begins, a security deposit equivalent to 3% of the negotiated amount is held.
If an issue arises during the transaction, either party can initiate a “dispute.” This feature calls for the intervention of a third party from Robosats to evaluate and resolve the matter.
The team behind Robosats manages these disputes, analyzing the situation and ensuring protection for the user affected by any misconduct.
What are disputes on Robosats?
Disputes on Robosats arise when there is a disagreement or conflict between trading partners. In such instances, either party can initiate a dispute, prompting the Robosats team to step in. The team then reviews the negotiation details to ensure fairness and prevent harm.
Additionally, in the rare cases where there is an attempt at fraud, a dispute can also be initiated to address and resolve the issue.
To request a dispute, traders can use the chat feature available on Simple X, accessible via the main RoboSats group.
Also, it’s important to note that Robosats does not have access to private chats between traders. Therefore, in the event of a dispute, it is necessary for the involved parties to provide a detailed account of the events and, if possible, screenshots to support their claims.
How are trades conducted on Robosats?
Starting a trade on Robosats is straightforward, but there are important requirements you need to be aware of during the transaction process.
Upon accessing the platform, you’ll encounter the offers page. Here, you can view listings from individuals looking to sell Bitcoin as well as those aiming to buy.
Within these offers, some information is important to understand what is involved in your trade, such as premium, bonds, and trading guarantee.
Premium
The premium represents the price difference (above or below) of the current Bitcoin rate relative to fiat currencies as found on conventional exchanges.
On the homepage, order prices are automatically adjusted to reflect the corresponding premium.
Typically, the premium is set at +5%. This amount is strategically chosen to compete with other robots and to encourage market liquidity.
Generally, they work like this:
- Positive Premium: Trade BTC at a price higher than the average price on centralized exchanges.
- Negative Premium: Trade BTC at a discount to the average price on centralized exchanges.
- Zero Premium: Trade BTC without any price difference compared to the average price on centralized exchanges.
- Relative Pricing Method: Allow the premium price to adjust according to the Bitcoin market rate.
- Explicit Pricing Method: Set a premium price using a fixed amount of Sats.
- Premium Ranking: Show how your order premium ranks among all public orders in the same currency, ranging from 0% (lowest premium) to 100% (highest premium).
Bonds
Bonds on Robosats act as fidelity guarantees. They represent a small deposit that is locked by the user and released only after the transaction is successfully completed between trading partners.
These bonds are designed to encourage users to adhere to the platform’s rules. They are implemented through invoices held on the Lightning Network, which is Robosats’ native network.
By default, bonds are set at 3% of the traded amount, though users have the flexibility to adjust this percentage anywhere from 2% to 15%.
Therefore, to trade on Robosats, you need to have some bitcoins. If this is your first experience buying Bitcoin, there are various ways to acquire a small amount to serve as a guarantee on the platform.
Robosats suggests earning satoshis through apps like Stacker News, Fountain, Bitcoin Magazine App, and THNDR. Anyway, it’s important to note, however, that Robosats has no affiliation with these platforms.
Alternatively, you can purchase satoshis through Azteco vouchers.
Trading guarantee
When selling Bitcoin on Robosats, a trading deposit is required as collateral and is issued through invoices generated on the Lightning Network. This system is designed to protect the buyer against fraud or default by their trading partner.
The person issuing the order sets the expiration time for the order, which can range from 1 to 8 hours, with a default setting of 3 hours. So, if the seller fails to secure their trading deposit within this specified time frame, they will forfeit their fidelity bond.
How do Robosats fees work?
The platform charges a fee of 0.2% of the total trade amount. This fee is shared between the order creator and the taker, paying 0.025% and 0.175%, respectively.
In addition to these fees, there may be Lightning Network fees or on-chain network fees if the transaction is conducted on the main chain.
What do you mean by on-chain network?
Although Robosats primarily focuses on transactions conducted on the Lightning Network, trading on the on-chain network is also possible.
After the taker locks their bond, you will see options for a Lightning or an on-chain invoice under “Waiting for buyer’s invoice.”
However, on-chain fees can vary significantly, ranging from 1% to 10%. These rates can be checked by using the “%” button on the homepage.
On Robosats, users also have the option to convert satoshis to on-chain bitcoin or vice versa. To perform this conversion, navigate to the end of the coin drop-down menu on the homepage, select the desired network for the trade, create an order, and wait for a trading partner.
Using Robosats: A Practical Tutorial
Now that you’re familiar with how the platform operates and its main features, it’s time for some hands-on experience!
In this tutorial, we’ll guide you step-by-step through using the Robosats website to make your first purchase.
Step 1: Access Robosats
- First, you’ll need the Tor browser to access Robosats. If you don’t have it, you can download it here.
- You will also need a Lightning wallet and some satoshis as a guarantee on Robosats.
Step 2: Set Up
- After installing Tor and setting up your Lightning wallet, navigate to the Robosats website.
- Upon arrival at the homepage, click on “start” to generate your random robot token.
- Remember to save this token securely in case you need to recover your robot.
- After generating the token, your random robot avatar will be created.
Step 3: Browse Offers
- Click on “offers” to view available orders. Use filters at the top to specify your preferred currency and transaction type (buy, sell, swap, etc.).
- Select an offer and the amount you wish to buy. Verify all the information and click on “take order.” (A red or green dot next to the seller’s avatar indicates their online status.)
Step 4: Secure the Trading Bond
- After confirming the order, you’ll need to secure a trading bond, which will be held until the negotiation is finalized. This amount will then be returned to you.
- Then, an invoice will be displayed for you to lock the amount.
Step 5: Complete the Transaction
- Pay the invoice using your Lightning wallet and generate another invoice with the indicated amount, pasting it into the provided space.
- Wait for the seller to lock the trade amount. Once they do, Robosats will open a chat window between you two. During this chat, encrypted with PGP, ask the seller for the fiat payment details.
- After making the fiat payment, confirm it on Robosats.
Step 6: Finalize
- Once the seller confirms receipt of the payment, Robosats will release your satoshis to the provided address.
- Upon completion of the transaction, the initially locked amount is released, and you can review a summary of the transaction.
Recommended Lightning Wallets by Robosats
Robosats recommends several Lightning wallets that you can use for your trades, including:
- Alby
- Blink
- Blixt
- Blue
- Electrum
- Mash
- Muun
- Phoenix
- Wallet of Satoshi
- Zeus
Conclusion
There are numerous options available for buying Bitcoin, each catering to different preferences.
While traditional and custodial platforms often provide a more user-friendly experience, as we’ve demonstrated in this article, using Robosats is straightforward.
So, if you’re looking to use Bitcoin in its most authentic form, P2P platforms like Robosats are an excellent choice. They allow you to acquire satoshis while protecting yourself from widespread government surveillance.
However, it’s crucial to familiarize yourself with the platform and understand how self-custody works since you will be fully responsible for managing your assets.
I hope you found this article helpful. Feel free to share it with friends who are also interested in buying Bitcoin without undergoing KYC procedures!
Until next time, and OptOut!
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Founder of Area Bitcoin, one of the largest Bitcoin education projects in the world, she is a marketer, passionate about technology, and a full-time hands-on professional. She has participated in major Bitcoin conferences such as Adopting Bitcoin, Satsconf, Surfin Bitcoin, and Bitcoin Conference.
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