🔰Atomic Swap: Redifining the Cryptocurrency Exchange Ecosystem
What is an Atomic Swap?
An atomic swap is the ability to swap different types of tokens of cryptocurrencies across different chains. So an example would be, I would be able to swap a Litecoin for a Bitcoin without having to use a centralized exchange. Now, from a technical standpoint, this has been possible for quite a while. It's just been a little bit clunky, but now with the improvements to the protocol like a segregated witness and also fixes to go into a place that addresses things like transaction malleability, atomic swaps are a much more realistic thing.
It essentially allows you to swap one cryptocurrency for another by submitting transactions to both blockchains. One party has a shared secret which is, logs from the other person's view but when they complete their side of the deal, that secret becomes obvious to the person on the other side. The user is then able to use that shared secret to redeem the currency for the currency that they just exchanged. Now, this is really cool because it means that if you agree with somebody on a certain price, for example, I'm going to trade one Bitcoin for x amount of Ethereum, I can do it all without having to have an intermediary or a third party.
The obvious problem though is that you have to be in contact with that person and negotiate the terms one on one before you go through with the atomic swaps. Atomic swaps are getting a bit more attention right now because Charlie Lee, the founder of Litecoin was able to do an atomic swap with somebody on the Decred platform. But again, this did involve offline communication between Charlie Lee and the other party in order to facilitate this trade. So, I think atomic swaps are really cool and they are related to the lightning network. But the one issue we need to solve is how those trades are negotiated in a scalable way. Right now exchanges fulfill that by doing the automatic auto-matching.
Atomic Swaps are how decentralized exchanges going to function. The decentralized exchanges will have an off chain system though for matching people and negotiating those trades. Somebody will say, hey I want to trade this amount of Ethereum and a person on the other side will be able to pick that up and then do the atomic swap. It's still really early days, but it's good to see that we are making progress on this front and I believe over the next 12 to 18 months we are going to see it hit the mainstream.
This is really a big milestone in the crypto space, as much as it is simple it really proves that cross chain atomic swap really works. This is the future of cryptocurrency exchanging. Skeptics who are always doubting the potential of cryptocurrencies won't be able to stop this. What you guys think about it? I would like to read what you guys think down in the comments below. Get the discussion going can atomic swap going to stop the need for the majority of the exchange transactions?
References and Further Reads: 1 & 2
Upvoted. I'm going to resteem this now :]
thanks for the support :)
That info was new for me and really helpful
I'm glad you found it helpful.
Just keep sharing the good work :)
@vj1309 got you a $9.37 (4.0%) @minnowbooster upgoat, nice! (Image: pixabay.com)
Want a boost? Click here to read more about @minnowbooster!
The @OriginalWorks bot has determined this post by @vj1309 to be original material and upvoted it!
To call @OriginalWorks, simply reply to any post with @originalworks or !originalworks in your message!
To enter this post into the daily RESTEEM contest, upvote this comment! The user with the most upvotes on their @OriginalWorks comment will win!
For more information, Click Here! || Check out our contests as well!
Special thanks to @reggaemuffin for being a supporter! Vote him as a witness to help make Steemit a better place!
This is interesting maybe wallets like Jaxx and coinomi could do this and make things simpler andore direct/safer
Congratulations! This post has been upvoted from the communal account, @minnowsupport, by vj1309 from the Minnow Support Project. It's a witness project run by aggroed, ausbitbank, teamsteem, theprophet0, someguy123, neoxian, followbtcnews/crimsonclad, and netuoso. The goal is to help Steemit grow by supporting Minnows and creating a social network. Please find us in the Peace, Abundance, and Liberty Network (PALnet) Discord Channel. It's a completely public and open space to all members of the Steemit community who voluntarily choose to be there.
This post has received a 10.09 % upvote from @boomerang thanks to: @vj1309
@boomerang distributes 100% of the SBD and up to 80% of the Curation Rewards to STEEM POWER Delegators. If you want to bid for votes or want to delegate SP please read the @boomerang whitepaper.
This wonderful post has received a bellyrub 16.68 % upvote from @bellyrub thanks to this cool cat: @vj1309. My pops @zeartul is one of your top steemit witness, if you like my bellyrubs please go vote for him, if you love what he is doing vote for this comment as well.