Qtum, a blockchain platform that combines the strength of Bitcoin’s blockchain
with the Ethereum Virtual Machine to develop decentralized applications, has actually finished its very first atomic swap with Bitcoin on mainnet. This is a huge, primary step for atomic swaps, a function that enables on-chain exchanges, or deals, in between cryptocurrencies on 2 different blockchains without the requirement to depend on a 3rd party. For Bitcoin, this is a huge action
forward in permitting interoperability in between other blockchains and itself in a trustless way. Atomic swaps are not a totally brand-new function, as Bitcoin Magazine has actually reported on
a Lightning Network ERC-20 swap with bitcoin simply a couple of months back. According to Qtum’s article, the primary option that makes atomic cross-chain swaps possible is Hash Time-Locked Contracts, or HTLC. In a short summary, HTLC basically secures the funds in a deal for sufficient time so that both blockchains have the ability to validate the transfer of funds by themselves( through block verifications)and provides both celebrations time to declare their funds. Whatever is returned back to the initial celebrations if sufficient time passes where one side has actually not declared their funds. The whole procedure of the atomic swap is explained in the post as follows: Alice starts a deal on Qtum which includes a time-locked agreement and transfers QTUM to Bob.
In the last year, Qtum has actually made considerable leaps forward in establishing its blockchain for higher adoption and interoperability. Atomic swaps are simply the next step.They are likewise a vital, next-step function for interoperability with the Lightning Network.
Why Are Atomic Swaps Important?
Atomic swaps resolve a huge issue in cryptocurrency, which is the failure to straight exchange 2 various kinds of currencies with each other without needing to depend on a relied on 3rd party like an exchange or business.
In a present example, let’s state Alice wishes to purchase a digital collectible from Bob, and there is no other way to sell individual. Bob might quickly get the funds and not send out the collectible in return if Alice desires to send out loan to Bob for a collectible. The reverse might occur, where Bob sends out the collectible very first and Alice never ever sends out the cash in exchange.
The issue in today example is the aspect of trust. It ends up being much more dangerous when trust is factored into the danger of exchanging things online. Atomic swaps are a service to this issue, as explained above, due to the fact that they permit funds to be exchanged in between celebrations without needing to depend on anything however mathematics to make sure the procedure has actually been finished efficiently.