Trade Bitcoin for Standard Tokens on Ethereum.
Alice wants to sell some ETH for bitcoins. She will accept delivery
at her bitcoin address 1SendBitcoinsHerePlease.
Alice makes an offer to trade 30 ETH for 10 bitcoins, with a 1 ETH deposit to be forfeit in the case of non-payment:
var id = market.offer(30, eth, 10, 1SendBitcoinsHerePlease, 1, eth)
This transfers 30 ETH from Alice to escrow in the market.
Alice can cancel her offer, which will return her 30 ETH and delete her offer:
market.cancel(id)
Bob has some bitcoins and wants to buy some ETH. He commits to buy Alice's offer:
market.buy(id)
This takes the 1 ETH deposit from Bob into market escrow. Alice can no longer cancel her offer. Bob now has 1 day to send the required bitcoin to Alice's address, or he will forfeit his deposit.
Bob now has a two step verification process to assert that he has sent his bitcoins. First he needs to tell the market the bitcoin transaction hash that he used to send the bitcoins:
market.confirm(id, bobs_tx_hash)
Then he needs to verify this transaction by calling btc-relay:
relay.relayTx(rawTx, txIndex, merkleSibling, blockHash, address(market))
Note that the relay needs to know quite a few details of the transaction, which Bob will have to provide himself. If the transaction is valid (which currently means having > 6 confirmations), then the market will be notified and Bob will receive his ETH.
If Bob does not relay his transaction within 1 day then Alice's obligation to pay Bob will be voided and she will be able to claim her funds and Bob's deposit.
market.claim(id)
market.cancel(id)