Dispensers: What are they? How to use them?

A dispenser is basically a vending machine: someone locks an arbitrary amount of an asset and enables everyone who sends the right amount of bitcoin to get ownership of the asset.

You see what you want to buy, choose the deal you prefer, and then proceed to make the purchase.

Dispensers are a basic form of smart contracts. But their automated nature also comes with a tradeoff: there’s always a risk that the dispenser gets emptied before your transaction confirms. So if you set a low transaction fee and therefore wait a couple of days until the first confirmation, you expose yourself to the risk of dealing with a closed or emptied dispenser.

There is no way for the Bitcoin transaction to get unsent and there is no mechanism in place to return your money if the entire supply of Counterparty tokens gets sold out before you got your hands on your desired digital asset.

This is why you should ideally pay for a higher transaction fee, as a way to make sure that you’re among the ones who get the fair deal.

You should also try to only buy from dispensers created by addresses you recognize – if you know the owner and rely on their reputation, you’re more likely to get your bitcoins back if the trade doesn’t take place.

Note: Never send BTC from an exchange. Only send BTC to a dispenser from a BTC wallet that you have access to the private key, preferably a counterparty wallet of some sort.