What is an Atomic Swap?

So, if someone needs to exchange Bitcoin for Litecoin, simply find someone who needs your Bitcoin and is willing to deliver Litecoin to change.

Definition

Atomic swap is a technology that facilitates the exchange of two cryptocurrencies different through the use of a contract smartphone, which allows users to make exchanges from your wallet and personal in a transaction a peer-to-peer. The first described a protocol the Atomic Swap was probably Land Nolan in 2013. But already in 2012, Daniel Larimer had submitted its P2PTradeX, a protocol exchange with no confidence that have been considered by many as the prototype of the Atomic Swap. Since then, there are many developers who have experimented with these protocols that have played an important role in communities such as Bitcoin, Litecoin, Decred and Komodo. As is known, the first Atomic Swap were in 2014, but it was in 2017 when it was publicly acknowledged with the first exchanges with success among cryptocurrencies. We trade BTC/LTC and LTC/DCR.

How it works the protocol Atomic Swap

As we have already said, is a protocol designed to facilitate the exchange of cryptocurrencies different. So, if someone needs to exchange Bitcoin for Litecoin, simply find someone who needs your Bitcoin and is willing to deliver Litecoin to change. This exchange is possible thanks to a contract smart contrat), designed for a transaction peer-to-peer.

Atomic Swap in practice

We think Andrew you need to swap your LTC for BTC, and Ruben has BTC. Alice is willing to receive the LTC of Andrew, and then Andrew puts his LTC in one direction Smart Contrat, which pretend as a safety deposit box. At the time that Andrés generates your safety deposit box you must create an access key; this key should be share Ruben by using a cryptographic hash. But Ruben can’t still access to the cryptocurrencies because it just has the hash, but not the key. Then Ruben uses the hash received from Andres to generate another Smart Contrat to deposit their BTC. Now for Andrew to withdraw the BTC you need to use the same key that you used Reuben, and in doing so reveals to him the key to Reuben. So, just Andrew to claim the BTC, Ruben you can check out the LTC by completing the exchange. This distribution of keys is known as the Hashlock.

How to occur the Atomic Swap

These transactions carry the name atomic, because it will only be completed if the parties perform what corresponds to him to each one. On the contrary, if one of the parties gives up and does not comply, the contract is dissolved, and the funds are returned automatically, providing strong security to the parties. These contracts can be done in two ways, within the blockhain and out of her. On Chain: these Atomic Swap occur within networks of any criptomoneda, that is to say, within the blockchain, whether it be Bitcoin, Litecoin or another. Off Chain: for these Atomic Swap is made must take place on a second layer, and is usually done through exchange, bi-directional, very similar to those that are made through connections of the Lightning network. Usually these exchanges are performed through contracts smart multifirmas and contracts hash time-limited (HTLC)

Wallet for Atomic Swap review

Atomic Wallet is one of the wallets decentralized most popular, designed specifically for the use of this protocol to the blockchain. Available for Windows, Mac OS and Linux. Has available the protocol to be used with more than 300 cryptocurrencies, for fast and secure transfers thanks to the design the own company, Atomic Distributed Orderbook. Between the cryptocurrencies available for Atomic swaps include: Bitcoin, Ethereum, Litecoin, Ripple, Dash, Zcash, Monero, and an extensive list of tokens ERC20. For the security of the storage of funds, the portfolio Now provides the customer with all of their private keys, so that is the only one able to control them. The following two tabs change content below. Creative editor and trader of cryptocurrencies, currencies, fiat, and commodities.

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