Bitcoin

Atomic Swaps, the evolution of exchanges on the blockchain

benefits

Interoperability: Atomic Swaps offer interoperability for exchanges between different chains (blockchains).

Speed ​​and economy: Executing the contracts in an atom swap speeds up the process and at the same time leads to savings on commissions if third parties were used for the exchange.

Atomic Swaps, the evolution of exchanges on the blockchain
Atomic Swaps, the evolution of exchanges on the blockchain

Transparency and Security: The atomic swap provides a secure channel between the two parties to the transaction, with only them knowing the private keys. The time-limited transaction ensures the transparency of the transaction. It is possible because you will receive a secure refund of your money if either party does not choose to do so or refuses.

Diversification: Since atomic exchanges allow you to easily trade all digital currencies on a peer-to-peer exchange, investors can diversify into various digital assets of their choice instead of getting stuck with the currencies only offered by the exchange.

Better privacy: since transactions on atomic exchanges are carried out in a completely trustless manner, in which no third party is involved and the user is responsible for your personal data such as private keys etc. the information exchanged is not stored on a third party server.

disadvantage

Technical specifications: While Atomic Swaps offer some attractive features, they still have a few drawbacks to address before they are easier to implement.

The exchange of cryptocurrencies should generally take place between chains with similar technical characteristics.

The digital assets concerned must also have special planning functions (HTLC or extended Smarts contracts).

Wallet Adoption: the support of various digital wallets for atomic exchange. At the moment the choice is pretty limited. This would automatically improve when the technology is adopted.

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