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April 2017
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Coin Sale Pricing at Bittrex

In this post I hope to clear up confusion about BRK pricing on Bittrex.

James StroudJames Stroud

I’ve seen a lot of confusion about the coin sale pricing at the Bittrex sale page for Breakout Coin. In this post I hope to clear up much of that confusion. For the impatient, the bottom line is that the real price one actually pays at the sale is much less than it appears on the sale page. Please keep reading to understand why.

As I type this, it takes 0.8695652 BTC to buy 1 “BRK Share”. A lot of readers may ask “Is this the right price?” Actually, the answer to that is no, it’s not the price of Breakout Coin, it’s the price of something that Bittrex calls “BRK Shares”, and is their answer to the fact that we only have a limited number of coins for sale.

When you purchase BRK at the Bittrex coin sale, you buy a fraction of the total number of coins for sale, proportional to the size of your purchase. The price reported is not the price of a BRK, but a placeholder price (BRK Shares) that is used to calculate how many BRK you will receive when the sale is complete.

Currently the price of 1 BRK is 0.00019323 BTC, or 5175 BRK/BTC.

This latter number, 5175 BRK/BTC, represents the current 15% bonus applied to the BTC. This means that the BTC itself is multiplied by 1.15 and applied to the “floor price” of 4500 BRK/BTC (0.000222). The math is 4500 * 1.15 = 5175.

Although you can estimate how much BRK you will be credited with by using this conversion, your projected balance may decrease if the total funds received in the coin sale exceeds 1,472.79 BTC.

So, what happens when we sell less than 1,472.79 BTC of BRK (applying bonuses to the BTC)? In this case we have unsold BRK that will be provably destroyed by Bittrex, and the 1 BTC with 15% bonus applied bought 5175 BRK (1.15 * 4500).

On the other hand, if we sell more than 1,472.79 BTC of BRK, the price of BRK goes up.

A couple of examples are below for the ambitious. They may be difficult to follow, so only press on if you are really motivated to understand the math.

Examples for Deeper Understanding

Let’s say a buyer buys 1 BTC of BRK as I write this, while the real price (not the “share” price, as Bittrex calls it) is 0.00019323 BTC/BRK. If the sale brings in less than the cutoff of 1,472.79 BTC (after applying bonuses to the BTC), then the buyer will receive 5175 BRK/BTC (1/0.00019323). Of the coins for sale (not to be confused with amount sold), this represents about 0.0781% (5175/6,627,494) because there are 6,627,494 coins for sale

So far, we haven’t really dealt with the concept of “shares” because it has been possible to directly calculate the amount of BRK bought given the amount of BTC paid. Let’s now assume that the total BTC collected (with bonuses applied to the BTC) is 2,000 BTC, exceeding the 1,472.79 BTC cutoff. In this case 1 BTC bought with 15% bonus becomes 1.15 BTC. The 1.15 BTC is divided by the total of 2,000 BTC to get the fraction 0.000575, meaning that the buyer bought 0.0575% of the total shares. This number is multiplied by the total BRK for sale (6,627,494 BRK) to obtain the buyers total purchase: 3180.8095 BRK. As an equation it looks like

3180.8095  = 6,627,494 * 1.15 / 2000

James Stroud, Ph.D., is the lead developer for Breakout Chain, the blockchain carrying Breakout Coin, which is the chip used for the online gaming platform developed by cryptocurrency startup Breakout Gaming. Dr. Stroud is also a co-founder of CryptoCertify, the first company to focus on auditing both the code and deployment of cryptocurrency applications.