How to Buy Burst on BTDEX
What this guide is not
There are other guides to how Burst works, what makes Burst unique, how to run a Burst node, how to mine Burst, and so on. This guide is not among them. There is no description here of how Burst works because there are other resources for that purpose. Nor does it provide a detailed look at btdex’s operation. Before you open your wallet, you should already understand what you are buying.
Who this guide is for
After reading, you should feel confident placing, filling, and completing an order on btdex. All you need is to conceptually grasp that Burst is a currency to trade for other currency.
Buying, Burst first
In keeping with our pragmatic theme, we will look at the most superficially functional way to place a buy order. We’ll need three things- Burst, another currency supported by btdex, and a contract.
Yes. We need Burst to buy Burst.
There is currently a chicken-and-egg issue to prevent spam (Denial of Service attacks on the smart contract system) by bad actors. So, even transactions to buy Burst cost some Burst as a “security deposit.” Initial Burst can be obtained by mining, purchasing through a centralized Know-Your-Customer exchange like Stex or Bittrex, or from a trusted member of the Burst community in the Burst or btdex Discord. You can also trade with Harvey the Discord bot! For now, these approaches are something we must accept.
So start small, because your first buy will probably be your most difficult. Until the chicken-and-egg issue is resolved (and with the exception of using Harvey), all Burst transactions will require a security deposit of at least 1% of the amount of the exchange in Burst. This means that if you plan on buying 100,000 Burst at once, you are going to need at least a prohibitive 1,000 Burst to initiate the transaction.
Your currency pair
Because we need to start small, the currency you want to exchange for Burst should have low fees. While BTC, ETH, and any coin supported by btdex are possible to exchange for Burst, consider the transaction fee.
If you are trying to buy $5 of Burst and you are paying in a coin that costs $4 to send, you now have to spend $9 to receive $5. Until you can afford to secure larger transactions, choose something fast and cheap to send- the faster and cheaper the better.
The contract
To post your offer on the exchange, you need to pay for a smart contract. This fee is not required if you accept someone else’s offer. It is not necessary to post your own offer, but there are some advantages to doing so: you can name your own price and volume, and those who make offers are rewarded in a special exchange token (“TRT”) when their offer is accepted. TRT holders also receive a share of all trade fees proportionate to how many TRT tokens they have. As a newcomer to the market, these things should not immediately concern you, but they are worth mentioning. Otherwise, you are free to accept any existing offers if you can afford the combined price of the security deposit and offer itself.
Your first offer
Let’s begin by downloading the latest version of btdex. Hopefully, anyone reading this guide has at least browsed the software homepage. There is no installation, and the program will create its own configuration setup on first start.
By design, btdex contains everything you need to get started in the Burst ecosystem, including a wallet. Your recovery phrase is the key to the wallet, which holds your coins. Do not lose your recovery phrase. Your PIN is an additional security measure, but can be reset at any time if you have your recovery phrase. Do not lose your recovery phrase.
After some brief start-up, btdex will deliver you to the transactions screen:
Leave this page and move to the “CONTRACTS” tab with the handshake symbol, to the left on the same row as the “TRANSACTIONS” tab.
By default, this will show us Bitcoin. In the language of currency pairs, this is the Burst-Bitcoin pair, expressed as BURST/BTC. Burst is the base currency and Bitcoin is the quote currency, so the price shown on the “buy” side is how much Bitcoin it costs to buy one Burst, and the price on the “sell” side is how much Bitcoin one Burst will sell for.
We will now simulate purchasing Burst in Bitcoin, while also taking this opportunity to show how to read exchange offers.
Green and Red, Buy and Sell
If we wanted to register our own “Buy” offer, we would click the green “MAKE OFFER” button on the left side, underneath the heading, “People buying BURST with BTC.” In this image, people are offering to buy Burst for between 25 and 49 Satoshi, or 0.00000025 and 0.00000049 BTC, per Burst. The total amount of Burst and BTC to be exchanged is also shown.
However, in this example we are not making our own buy offer- we are taking an existing sell offer!
Instead, we will look at the right side, with the red labels. These are the “Sell” offers, made by people who have Burst and want to sell it, in this case for BTC. We want to buy Burst, so we will look at these offers to find the best one for us. In this image, people are offering to sell Burst for between 58 and 62 Satoshi, or 0.00000058 and 0.00000062 BTC, per Burst. The total amount of Burst and BTC to be exchanged is also shown. We will simulate taking the 58 Satoshi offer.
To begin, we would first click on the red label for the price we want, in this case, the 0.00000058 BTC price per Burst. This relationship will be made clearer in the window that appears:
Here, the same information shown on the order book is displayed. We have the Price per Burst in BTC, the Size of the lot for sale in Burst, and the Total price in BTC for the entire Burst lot. You’ll also notice that the network fee of 0.22205 BURST is shown- this is the price to send the message to the smart contract that you are taking the order. You can also see the security deposit in the top right, in this case 15%. This means that in order to take this order, you will need 30,000 BURST, to be held in escrow by the smart contract. Since you are the taker of the order (i.e. you did not post the contract), part of your security deposit will be held back by the system to pay the trading fee of 0.25%.
To illustrate, you will send 30,000 BURST as a deposit + 0.22205 BURST as a network fee to the smart contract. In return, you will receive 200,000 BURST (the amount you purchased) + 29,500 BURST (your security deposit minus 0.25% of the total purchased).
If the security deposit seems large, it is! But one must consider the size of the entire lot. This lot is being sold costs over 0.1 BTC, which at the time of writing is between $3,000 USD and $6,000 USD. Your first buy order will almost certainly be smaller, but the concepts remain the same.
Trade Instructions
Before we continue, let’s review the trade instructions:
You MUST transfer 0.11600000 BTC within 2 hours after this transaction confirms. After the BTC amount is confirmed on the sellers address, you will receive the offered BURST amount plus your security deposit back within 24 hours of you taking this offer.
If you do not follow this protocol, you might lose your security deposit. The mediation system protects you in case of trade disputes.
Let’s break down the information shown here. First, as the buyer, the onus is on you to complete the transaction. Once your acceptance of the transaction is confirmed, you will be able to click on the order listing again and the seller’s crypto address will appear. This is the address you will send your currency to, preferably as soon as possible. In our example, it will be a Bitcoin address. As the buyer, you will pay the non-Burst transaction cost. The seller will not cover it, and in many cases could not easily. Let’s pause here. We won’t immediately discuss how these fees could affect a transaction, but at make sure you understand this information before continuing:
Both buyers and sellers can purchase smart contracts and post orders. Purchasing a contract costs a small amount of Burst, and posting the contract will cost a transaction fee.
Both buyers and sellers will pay Burst transaction fees to relay messages on the Burst blockchain as part of the order process.
The order-taker, the person taking the order, whether they are a seller accepting a buy order or a buyer accepting a sell order, pays the btdex trade fee from their deposit.
The buyer, the person buying Burst, pays the non-Burst transaction fee on the quote currency’s blockchain.
Completing the Order
Now that we’ve accepted the order, we can return to our other wallet and initiate the quote currency transfer to the seller’s account as shown in the order. Make sure to double-check you are sending the payment to the correct address by directly copying the address. Complete this however you would normally send money; any explanation of how to send funds outside the Burst chain is beyond the scope of this reference. Once you have sent the funds, it may be helpful to post that you have finished your side in the appropriate Discord channel on the TRT Discord- this can help notify the other side of the payment, leading to a faster confirmation and completion. Now, all you need to do is wait for the seller to confirm your payment on the other chain!
You’re all finished! Congratulations on completing your first btdex purchase!
