BitBay allows you to create contracts where you can buy, sell, or exchange whatever you want. BAY is the built-in currency, and is required for all contracts, but not only for payments as you might automatically think. BAY is used for a much more important reason than just purchasing; it is also used as collateral to assure all parties complete a deal.
Here is an example of a possible contract. Let’s say I have $10 in Nexus (NXS) available, and want to sell it for $10 in BitBay (BAY). I, as the seller, am willing to put a $10 deposit in BAY as collateral, and as part of the contract I will require you to put up $10 in BAY on your side. After you and I satisfactorily complete the transaction, or both agree to cancel it, our BAY deposits are returned. To keep us honest and guarantee follow-through, if one of us refuses to mark it complete, we both lose our $10 in BAY deposits.
Here is a screen shot of the contract I would create in BitBay’s client. Please note, if creating your own contract, all values are in BAY unless you use a $ in front, in which case a conversion in USD is done for you. In this case, since the built-in currency is BAY, I can use $10 as the amount of payment and the amount of BAY will all be handled internally.
In a normal transaction…
1. You log into BitBay and see the offer available in the marketplace
2. You accept the contract – $10 in BAY is removed from your account for payment, and is put aside until the contract is completed. Another $10 is removed from your account for your deposit. $10 in BAY is also removed from my account for my deposit. Don’t like my terms? You can make a counter offer first.
At this point I have not actually received any BAY from you. I stand to lose my $10 deposit if I do not follow through, plus the $10 in BAY you are paying is already put aside for me, so unless money means nothing to me and I am evil, I am going to send you $10 in NXS. First, I need to know the NXS wallet you want me to send it to. We can either contact each other using the contact information provided in the details, or we can communicate using the BitBay messenger inside the accepted contract.
3. A notification saying ‘New Message!’ pops up on my screen in the top right. I open the Message and notice there is an open contract. I click on it and see you have sent me a message with your Nexus address.
4. I send you $10 in NXS from my Nexus wallet, and send a message back saying the transfer is complete. After making sure you receive it, I mark the contract as complete (Send Completion Request).
5. You also mark it Complete on your end.
6. I get my $10 BAY deposit back, plus the $10 in BAY the client pulled from your account for payment when you first accepted the contract. At the same time, you get your $10 deposit in BAY back. We can then use them for our next contract or purchase.