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Atomic Swaps: The Solution for DEX
#1
As promissed in another post today.
Hope it can help you to see why decentralised exchanges are the futur.


Atomic swaps, or cross-blockchain trading, is the exchange of one cryptocurrency to another cryptocurrency, without the need to call in a third party. Simply put: I exchange my Bitcoin against your Ethereum.


A relatively new piece of technology. Atomic cross-chain trading is looking for a revolution in the way users interact. For example, if Hugues owns 5 Bitcoins, but instead wants 100 Litecoins, he would have to trade via an exchange, so via a third party. However, with Atomic Swaps, if Bob owns 100 Litecoins and wants 5 Bitcoins instead, then Bob and Hugues could trade. For example, to prevent Hugues from accepting Bob's 100 Litecoins, but then not sending his 5 Bitcoins, Atomic swaps uses so-called hash timelocked contracts (HTLCs).

Hash timelocked contracts ensure that the Atomic swap process is completely reliable by ensuring that both meet the obligations of the exchange. HTLCs require the recipient of a payment to confirm receipt of the payment before expiry of the payment term by generating a cryptographic proof of payment. Or the recipient risks the risk of losing the right to the claim, thus returning the payment to the sender.

In order to establish a trade transaction between Hugues and Bob, both parties must therefore present their transaction to their respective blockchain, Hugues to the Bitcoin blockchain and Bob to the Litecoin blockchain. In order to claim Bob's 100 Litecoins, Hugues has to produce a number that he knows only to provide a cryptographic key and thus a proof of payment. And Bob, in order to claim the 5 Bitcoins sent from Hugues, must also mention the same number that was used to generate the cryptographic key.
What is this thing that builds our dreams, yet slips away from us?

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#2
Thanks for the post!
Cardano is the most promising 3 gen. crypto right now.


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#3
nice one, thanks!
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#4
(2018-09-20, 10:53 AM)chelios Wrote: nice one, thanks!

Long time we heard from you! Nice to see you are still here.
Cardano is the most promising 3 gen. crypto right now.


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#5
I am currently writing my master thesis and have much less time than before. The second think was a little bit of demotivation from the big crash.

i though after this many years i (and we) are now trading in this field, i should have seen the signals when all media started talking about cryptos and at least sell some of my holdings. i did not make any losses though, but all the profits vanished.
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#6
The bull race has started. Crypto is here to stay. It solves many problems that the corrupt system does not. The current system is based on trust by the men in power. We see scandal after scandal by those people. If blockchain is used correctly we will have a fair system instead.

Keep believing in a better world with less or no banks, but only blockchain for value exchange.
Cardano is the most promising 3 gen. crypto right now.


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#7
(2018-09-21, 02:34 PM)chelios Wrote: I am currently writing my master thesis and have much less time than before. The second think was a little bit of demotivation from the big crash.

i though after this many years i (and we) are now trading in this field, i should have seen the signals when all media started talking about cryptos and at least sell some of my holdings. i did not make any losses though, but all the profits vanished.

It is always a bead idea to sell during crashes. Hold is the message.
I believe a new bull race is on its way. If so you will be rewarded for your patience.
Demotivation is a sentiment, and sentiments are enemies for investments.
What is this thing that builds our dreams, yet slips away from us?

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#8
See also http://rimbit.dk/thread-923.html
Cardano is the most promising 3 gen. crypto right now.


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#9
Reading...
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