What is Atomic Swap? Atomic swap is a method of quickly swapping two cryptocurrencies running on different smart chains. This process is based on smart contracts and allows users to buy and sell personal coins directly from their personal crypto wallets. In short, it is a trade that takes place between different blockchains.
Although the idea of inter-blockchain transfer is an innovative method, it has actually been discussed for a long time. Tier Nolan was the first person to come up with the idea of atomic swap in 2013. Many people have introduced the idea of atomic swaps in the past. Others think that Daniel Larimer’s P2PTradeX protocol in 2012 was the first example. Then, some developers tried atomic swap. These; They are Bitcoin, Litecoin, Komodo and Decred. The first atomic swaps were made in 2014. However, it is technically known that it took place between DCR/LTC for the first time in 207.
What is Atomic Swap? What are the advantages?
One of the most important advantages of atomic swaps is their relationship with decentralized finance. Secure transactions can be made without the need for a central finance or third parties. If the two parties to the swap both approve the transaction, the swap will take place. Also, no cross-exchange transaction fees are charged. Another advantage of atomic swaps is that they protect against fraud. It is impossible for one person to defraud another person in atomic swap transactions. Technically speaking, Atomic swaps are used for Hash Timelock Contract (HTLC) and hash transactions, which are used for conditional payments in the cryptocurrency industry. HTLC contracts allow trades to be approved or disapproved.
In short, investors who want to exchange with each other have to approve or reject the swap in a short time. In order for an Atomic Exchange to take place, both parties must approve this trade. If both parties do not approve this trade, the exchange will not take place. Thus, it prevents fraudulent victimization. .
How does Atomic Swap work?
Users who want to perform atomic swaps have a few rules to follow. Transactions take place with the consent of the receiver and sender with the help of multi-signature wallets and smart contracts. In order for the transaction to be completed, both parties must approve.
There are some conditions for exchange between two users. The two cryptocurrencies to be exchanged must have the same hashing algorithm. Off-chain atomic swapping is possible. For this, some payment channels must be used in transactions. What is Atomic Swap? We searched for an answer to the question for you, we hope it was useful.
