I think that:
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The hardest part about arranging a F2F exchange is finding a willing exchange partner locally. Doing so requires a service with enough network effect to attract participants worldwide.
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LBC is useful for this, but they try to funnel users through their escrow service which means loss of possession of coins and trusting a centralized third party at least temporarily. Not everyone wants that, and some like myself actively avoid it and will only deal with the few traders that publish their contact info so no need to use LBC’s deposit-based communication channels. This leaves a market opportunity (niche) for Bisq, which should not require escrow.
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Bisq can serve a useful function to facilitate two parties finding each other and arranging a meeting location. Most of the infrastructure is already in place: offers, orderbook, p2p network, growing trading community, etc.
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It is a mistake for Bisq to attempt to arbitrate or take any position of responsibility for the trades. reason: It is practically impossible for Bisq arbitrators to validate the transaction. Even if video recorded by both parties, the bills could be counterfeit, etc.
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Reputation system(s) can help with (3) but are not a guarantee. Also, are difficult to implement without a way to validate that trades occurred successfully, and to avoid gaming eg via fake/sybil accounts trading with eachother.
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Given (3) and (4) the only valid approach I see is for Bisq to simply give both traders a big BOLD disclaimer stating that they are entirely responsible for results of the trade, no arbitration is possible, and they could very well be robbed, harmed, scammed, etc, etc, and make user explicitly acknowledge that risk before each and every transaction, possibly by requiring user to even manually type or handright/sign a sentence of acknowledgement. This is to cover Bisq’s ass.
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There are some users such as myself that have never and will never perform trades that require identity through a bank, and also will never use a third-party based escrow. (Not your keys, not your bitcoin). As far as I know, there is not any service that directly caters to this use-case. Bisq is perfectly suited to do it.
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Additional services surrounding the trades could be provided by third parties. For example a service to stream video to during the trade, in case of robbery. Or an escrow service. Or checking cash bills for counterfeiting. Or even an armed 3rd party bodyguard to accompany and “watch your back”. Or even performing the exchange on your behalf for a fee. These things do not need to be provided by Bisq directly. There is such a thing as personal responsibility. Bisq needs to recognize that its only role here is matchmaker to facilitate/initiate a trade… not to create some sort of false guarantee warm fuzzy for participants. Indeed, provision of these services can be thought of as market opportunities for early members of this community / forum.
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IANAL, but I would think that by NOT providing a reputation system, abitration, requiring deposit, or any pretense at protecting users and actively warning them up front, Bisq would be in a better situation legally in case of harm to F2F traders than if Bisq does try to protect them, or makes any assurances of protection, and fails.
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Even given (9) I personally would find it helpful if a reputation system is in place. I would suggest the following: a trader can have a count of the number of successful (without arbitration) fiat trades performed with trade partner via banking institution. This count would exclude crypto-crypto trades and F2F trades because these are too easy to fake/game. Individuals that provide a lot of liquidity would surely perform many many such trades, and thus could accumulate a count of 10s or 100s of trades.
Those are my thoughts, as someone that cannot / will not use Bisq for fiat exchanges with the present model, but likely would if the above approach is adopted.