Interoperability between cryptocurrencies is truly revolutionizing. Atomic swaps make this possible.This idea was first introduced around 2013. Today we have wallet services like Altcoin.io that provide a user friendly GUI interface to make atomic swaps happen seamlessly.
WHAT ARE ATOMIC SWAPS?
Atomic swaps allow for the exchange of one cryptocurrency to another cryptocurrency, without the need to trust a third-party. Altcoins offer different propositions and as a result attract a variety of users as per their requirements and beliefs, sometimes even convenience. Customers can hold altcoins that they frequently use and swap for the rest according to the specific need.
Atomic swaps are also referred to as atomic cross-chain trading because, essentially the transaction takes place between to blockchains of the respective altcoins.
When, Alice who owns 1 Bitcoins seeks to swap it for 10 Litecoins, assuming that to be the current market rate, she could make a trade or swap with Bob who wishes to swap 10 LTC possessed by him for 1 Bitcoin.
But how can Alice be sure that she does not end up losing the Bitcoin? To overcome this problem, atomic swaps utilize hash time-locked contracts which ensure that both fulfill the requirements of the trade. If the trade does not take place within a specific time frame, it get canceled and their respective coins are returned.
Altcoin.io is a decentralized cryptocurrency exchange powered by atomic swaps. Unlike a traditional cryptocurrency exchange,it is decentralised because it lets you maintain possession of your private keys. Altcoin.io has recenlty launched an alpha version of an atomic swap wallet for bitcoin and Ethereum. Check out the video below to get an understanding of how the swap can be made:
Atomic swaps can greatly reduce the role of centralized exchange, maybe only limited to the function of a fiat to cryptocurrency trading. Cryptocurrencies were essentially designed to be a decentralized form of payment between two trustless parties. With exchanges charging fees on every trade, atomic swaps are sure to gain huge popularity.
The firm promises to add support for more coins at their exchange. Not Just that, great features like automated order matching, swap support for a bunch of tokens and third party wallet support that would allow for great functionality to the users.
WHAT WILL THIS MEAN FOR CRYPTOCURRENCIES
Atomic swaps could revolutionize the future of bitcoin and altcoins. With decentralised exchanges, trustless payments can be settled with very low fees. This means a greater adoption and the cryptocurrencies would be the most preferred means for cross border settlements.
This also make is practical for users to deal with the numerous altcoins and tokens they posses. Searching for the best rate is a tedious job. Atomic Swaps make it easy for one to only get the required amount of the altcoin for a specific task of interest. This means people can only maintain a portfolio of coins that satisfy their needs largely. For everything else you have Atomic Swaps.