How to buy Bitcoin with fiat without using a third party intermediary

[happypsyduck]

Medium Article:
https://medium.com/@happy_psyduck/how-to-buy-bitcoin-with-fiat-without-using-a-third-party-intermediary-fb84086efaef

Most exchange methods to acquire Bitcoin with fiat require either trust in the escrow (or arbitrator) or the counter-party. This article describes trustless two party fiat to crypto trading.

All that is required is a small amount of ETH for the initial collateral. Because the collateral is returned after each swap, a person can repeat the swap to buy as much ETH as they want. Then use the ETH to atomic swap it for Bitcoin. No trust in a third party or counter-party is involved.

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[Sharon121212]

Most exchange methods to acquire Bitcoin with fiat require either trust in the escrow (or arbitrator) or the counter-party.

This is false exchanges do not really use escrow.  Escrow are often used when it involves two individuals trying to trade bitcoin then the services of an escrow is employed to ensure security of fiat and bitcoin.

[Stedsm]

Or, why not just simply take and keep the details of the trader you traded with, once? I always had a list of traders ready to be contacted almost immediately and swapped almost anything that I wanted to, without the need of any third party escrow - completely P2P but I believe it involves higher risks and chances of getting scammed and escrow saves you from becoming a victim. Exchanges are escrows? P2P exchange like Localbitcoins might be considered but those like Binance, Bitmex, Bitstamp can't be taken as escrows as trading there is instant and gets you your coins easily but for a spicy charge (not too much sometimes).

[happypsyduck]

Most exchange methods to acquire Bitcoin with fiat require either trust in the escrow (or arbitrator) or the counter-party.

This is false exchanges do not really use escrow.  Escrow are often used when it involves two individuals trying to trade bitcoin then the services of an escrow is employed to ensure security of fiat and bitcoin.

Or the counter-party

In this case, a centralized fiat-crypto exchange is a trusted counter-party. They could give you Bitcoin or rob you blind.

[akhjob]

Had a read at the article. Its an interesting read  
However..

Acquire $112.50 USD worth of ETH for the trade collateral using traditional methods (Can’t avoid this step as I need to show the seller I have something at stake prior to trading).

For entering a trade, you need collateral (150% of the trade amount) in ETH. And for acquiring the ETH required for the trade, you need to trust a third party intermediary.
So what's the point here for using the dex
If you can trust a third party to buy ETH, you can buy BTC from the same third party entity.

Sorry I missed your comment earlier.

[happypsyduck]

Had a read at the article. Its an interesting read  
However..

Acquire $112.50 USD worth of ETH for the trade collateral using traditional methods (Can’t avoid this step as I need to show the seller I have something at stake prior to trading).

For entering a trade, you need collateral (150% of the trade amount) in ETH. And for acquiring the ETH required for the trade, you need to trust a third party intermediary.
So what's the point here for using the dex
If you can trust a third party to buy ETH, you can buy BTC from the same third party entity.

I commented on this earlier:

All that is required is a small amount of ETH for the initial collateral. Because the collateral is returned after each swap, a person can repeat the swap to buy as much ETH as they want. Then use the ETH to atomic swap it for Bitcoin. No trust in a third party or counter-party is involved.

So you can build on the amount that you have already by using it as collateral to get more. Theoretically, you could have $10 of ETH laying around initially and do repeated trades (14 of them in fact) to eventually get $1000 worth of ETH. In such a case, you got $990 worth of ETH without using a trusted third party.

[Kakmakr]

To me this does not solve the problem with third parties, because you need to find willing traders on the FiatDex Telegram private channels <which is a third party> to serve as a counter-party? 

Also, once you get the ETH, you still have to exchange it for BTC on a non-custodial/decentralized exchange. <Once again a third party>   It is also a very tedious process and it might be to complex for most "newbie" users. 

Just go to a local Bitcoin meetup and identify trusted people to trade with and Bob's your uncle.... <No third party needed> 

[happypsyduck]

To me this does not solve the problem with third parties, because you need to find willing traders on the FiatDex Telegram private channels <which is a third party> to serve as a counter-party? 

Also, once you get the ETH, you still have to exchange it for BTC on a non-custodial/decentralized exchange. <Once again a third party>   It is also a very tedious process and it might be to complex for most "newbie" users. 

Just go to a local Bitcoin meetup and identify trusted people to trade with and Bob's your uncle.... <No third party needed> 

You don't need to find a trading partner via the Telegram group. This is an optional way to link up. You can find trading partners even here on the forum.

As mentioned in the article, using atomic swaps, a user can trade directly with another person. Using software that facilitates the trade (as these Dexes do) is not considered a third party. Throughout the entire process from fiat to Bitcoin, you do not need to trust your counterpart or an escrow. No reputation system needed.

Newbies may not want to do this but it is good for the community that this option is out there.

[Stedsm]

You don't need to find a trading partner via the Telegram group. This is an optional way to link up. You can find trading partners even here on the forum.

As mentioned in the article, using atomic swaps, a user can trade directly with another person. Using software that facilitates the trade (as these Dexes do) is not considered a third party. Throughout the entire process from fiat to Bitcoin, you do not need to trust your counterpart or an escrow. No reputation system needed.

Newbies may not want to do this but it is good for the community that this option is out there.

Wait, if anything is being used as a "medium of contact", how can't it be said as a third party involvement to settle things between two counterparties based on the data of the conversation that these third party apps have over cloud? And how will this atomic swap actually take place without the involvement of a software/app? Isn't that software itself considered to be a third party software that possesses the details of the transactions? Is this atomic swap some sort of a virtual box having two equal sides, one of which will take crypto in it and the other will take Fiat and swap immediately once both the equated amounts are filled in?