Add the beans, 8 cups of water, salt and pepper to an instant pot. Seal and cook on high pressure for 20 minutes. After this cook time, allow the pressure to release naturally.
Then remove the beans to a stainer in the sink and rinse them with cold water.
Switch the instant pot to the sauté setting. Cook the bacon and onion on the sauté setting for 3-5 minutes until the bacon starts to brown slightly. I cooked these items on the low sauté setting to prevent them from burning. Then scape down the bottom of the pot with a wooden or metal spatula to remove all the brown bits from the bottom of the instant pot insert.
Then turn off the instant pot. Add in the beans, barbecue sauce, ketchup, mustard, apple cider vinegar, liquid smoke and brown sugar. Then add in the 1 remaining cup of water. Stir to thoroughly combine all these ingredients.
Seal the instant pot and cook on high pressure for 10 minutes. Do a quick release to release the pressure from the instant pot after this cook time.
Remove the lid and stir. If you want a thicker sauce, switch the instant pot back to the sauté setting and cook for a few minutes to allow the excess liquid to cook off which will thicken the sauce.