• Press Releases
    • Submit a press release
    • Read All
  • Advertise
  • Contact us
Crypto.com Logo Crypto.com Logo
Bitcoinist.com
No Result
View All Result
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Press releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
    • Monero Price
    • MimbleWimbleCoin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Btcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Play Games
  • BET&WIN
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Press releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
    • Monero Price
    • MimbleWimbleCoin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Btcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Play Games
  • BET&WIN
Bitcoinist.com
No Result
View All Result
Atomic Swaps: What They Are, How They Work, and What They Mean for Digital Currencies
Nexo

Atomic Swaps: What They Are, How They Work, and What They Mean for Digital Currencies

Matthew Hrones by Matthew Hrones
5 years ago
in News, Blockchain, FinTech, News teaser
0
Advertisement

Many people in the development community have been working on a new feature for some coins called Atomic Swaps. These swaps completely remove the need for third-party oversight and put the trading of different cryptos into the user’s hands


Decentralized Trading?

In recent weeks there’s been a lot of talk in the crypto development community about a revolutionary idea known as a cross-chain Atomic Swap. Atomic Swaps are a new tech that is still undergoing heavy development that allows for trustless, peer to peer trading between different types of digital assets. Both trades happen instantly, so there’s no chance for one party to not hold up their end of the bargain. And in a scenario where one party backs out halfway through, funds are returned to both parties after a specified amount of time.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

This has enormous implications for the future of crypto-currencies, as the ability to swap coins seamlessly between blockchains opens a whole new world of potential uses.  Atomic Swaps could make traditional crypto-exchanges obsolete, as this new tech can grant users complete control over their money if they are looking to trade between different currencies.

How Atomic Swaps Work

Imagine two people, Alice and Bob, want to trade some Vertcoin for Bitcoin. Alice is the initiator in this scenario and creates a “lockbox” of sorts that holds funds during the swap. It is also known as a contract address. This lockbox is special, as to open it requires Bob’s signature and a secret number that Alice generates herself. It is important that Alice does not share the number with Bob, as he could simply open the box and take the coins before the swap even takes place.

BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?
Get 110 USDT Futures Bonus for FREE!

From there, Alice takes the secret number and creates a hash of the number. A hash is a number derived from the first that is mathematically tied to the first, but it is impossible to figure out the first number from the hash. However, it is very easy to get the hash from the original number. The hash acts as the lock, the number being the key. So, while Alice has both the lock and key, she cannot open the box and get her funds back because it still needs Bob’s signature.

Bob will then look over Alice’s contract address and make sure everything is in order before he creates his own lockbox. Alice will send Bob the hash of her box so that Bob can make a similar box with the exact same key, but in his case, he needs Alice’s signature to open it.

From this point, Alice has both the key and the ability to sign for Bob’s box and can redeem the funds tied to the address. When this is done, the secret number that Bob needs but does not know is broadcasted for all to see. Bob can then take the secret number, open Alice’s box, and redeem the funds.

In a scenario where Alice or Bob backs out halfway through the swap, both lockboxes are made so that if the swap does not take place all funds are returned to their owners depending on a specific time period set by each party.

Both parties agree on an exchange rate and then the trade is completed. No third party required.

Further Implementations

Currently, there are only select currencies that can participate in an Atomic Swap. Recently, Litecoin and Decred made headlines when the founder of Litecoin, Charlie Lee completed one of the first atomic swaps between himself and the Decred development team. Bitcoin, Litecoin, Decred, Viacoin, and Vertcoin are the only currencies that have successfully completed Atomic Swaps, the code being open source to allow anyone interested to give it a shot for themselves.

Yesterday I did an on-chain atomic swap of 1.337 LTC for 2.4066 DCR w/ @_alyp_ of @decredproject. (See txns: https://t.co/BlxU1QBK2U) ⛓️⚛️💱🚀 https://t.co/wPqzdw40Gp

— Charlie Lee [NO2X] (@SatoshiLite) September 20, 2017

Decentralized exchanges could spawn thanks to this new advancement, once much more rigorous testing can take place. This is huge, especially with constant news stories of this exchange getting hacked for all their worth and that one losing customer info. With an atomic swapping based exchange, users would have control over their funds the entire time and could be as anonymous as their currency of choice allows.

What do you think about atomic swaps? Do you think they’ll become mainstream moving forward? Let us know in the comments below!


Images courtesy of Pixabay, Pexels

ShareTweetShareShare

Sign Up for Our Newsletter!

For updates and exclusive offers enter your email.

I consent to my submitted data being collected and stored.
Matthew Hrones

Matthew Hrones

I'm a computer science student with heavy interest in cryptocurrencies and decentralized systems. I've been writing since the June 2017, and hope to become more involved in the community as time goes on

Related Posts

Legal Experts Reveal Regulatory Uncertainty Around Crypto Could Spike Lawsuits

Legal Experts Reveal Regulatory Uncertainty Around Crypto Could Spike Lawsuits

20 hours ago
Cryptoqueen

‘Cryptoqueen’ Has A $100,000 Bounty On Her Head Offered By The FBI

2 days ago
Three Arrows

Three Arrows Capital Gets Notice Of Default On $660 Million Voyager Loan

6 days ago
Morgan Creek

Morgan Creek Said To Be In Bid To Secure $250-M To Counter FTX BlockFi Bailout

6 days ago
Harmony

Harmony Dangles $1M Reward For Return Of $100M Stolen Funds – Is It Enough?

6 days ago
Ripple

Ripple To Hire 50 Engineers For Its New Crypto Hub In Canada

1 week ago

Bitcoin news portal providing breaking news, guides, price analysis about decentralized digital money & blockchain technology.

Bitcoin

  • News
  • Price
  • Businesses
  • Acceptance
  • Technology
  • Investment
  • Regulation
  • Reviews

Altcoins

  • News
  • Price
  • Ethereum
  • Ripple
  • Litecoin
  • EOS
  • NAGA

Categories

  • Blockchain
  • Security
  • FinTech
  • Technology
  • Trending
  • Breaking News
  • Press Releases
  • How to

Pages

  • Contact us
  • Editorial Policy
  • Advertise
  • Crypto Prices from Nomics
© 2022 Bitcoinist.com. All Rights Reserved.
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Press releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
    • Monero Price
    • MimbleWimbleCoin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Btcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Play Games
  • BET&WIN

© 2021 Bitcoinist. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.