Did you ever heard about Atomic swap ?
In last one year atomic swap is getting lot attention in cryptoworld. The reason this word becoming popular in cryptocurrencies atomic swap is about to change current cryptocurrency exchange problems.
I think we all experienced current cryptocurrency exchange problems in some way. When first i encountered blockchain technology i seriously amazed how secure and innovational is it. We all know cryptocurrencies are doing most fastest and secured transaction around the world thank's to the blockchain technology.
But cryptocurrency exchange is not secured enough. Before we talking about this you need to know there is 2 type of cryptocurrency exchange exist.
Centralized exchange
Centralized exchange is regular exchange that we using now. There is company behind it and third-party is moderating the site and exchange.The company is handling all our money with our permission. For example: we mostly use coinbase, binance, bittrex, bitfinex and etc , for exchanging our cryptocurrencies to usd or other cryptocurrencies. But there is lot of flaws in these type of exchanges .
Hacking issue: I think you heard lot news about cryptocurrency exchange hacked. Just in last Japanese one of biggest exchange hacked and lost almost $500 million. Not just that there is lot big incident exist around cryptocurrency exchanges even though cryptocurrencies are giving most secured transaction, exchange sites can't give it for us.
Bad customer suppport: This is one of the biggest problem in exchange site if you write ticket about your problem. They are respond to your ticket almost one month. In some case even more in that situation we can't do anything because they don't respond . This is one of the sad and biggest problem in centralized exchange.
Decentralized exchange
After we encountered these type of problems idea that came from is decentralized exchange. Decentralized exchange is exchange completely decentralized manner and using blockchain technology for it's exchange site. This gives us lot more secure and say bye for hacking issue. But there was problems to ...
Even though decentralized exchange gives innovation for exchange system people are still sticking centralized exchange. Then what is problem ? Decentralized exchange is lot more secure that centralized exchange but the reason people barely using is first centralized exchange is more convenient and easier compared to that decentralized exchange is little bit hard to use because it's using blockchain tech and slow. More of that people are already used to centralized exchange and don't wan't to change it. But i think in few year decentralized exchanges are getting more popular and more people will start using it so it's all about time matter.
What is Atomic swap ?
Atomic swap is trustless exchange system. Atomic swap is using smart contract for exchange cryptocurrencies or tokens. Due to that you don't need to worry about risk of one party defaulting on the trade and there is no third-party escrow involved in you trade so there is no trading fee.
Therefore, while engaging in an atomic swap, the trade will either happen and both parties will receive their respective coins or the trade will not be successful. In other words, there is no middle ground involved in executing the atomically swapped trade.
Atomic swaps are also often called cross-chain atomic swaps, beacouse of two different cryptocurrencies that are present on different chains can be exchanged atomically without any trusted third party and there is no exchange/trading fess involved in this.
But there will be miner fee so all you need is pay little miner fee and exchange will happen most secured way. And people are talking 2 type of atomic swap: off chain atomic swap and on-chain atomic swap. I think both of them are very innovation thing in cryptocurrency exchange system.
What we expect in a future ?
As far as the future of atomic swaps is looks good and promising even though there is lot of problems we can expect good result in a future
We are close to see a decentralized exchange or service that would leverage both these on-chain atomic swaps and off-chain atomic swaps. That will be more secure and easier for exchange cryptocurrencies without third-party involved.
Another thing that these atomic swap services will focus on will be the user experience, Currently it would be too difficult for regular people to use but eventually it will become more easier.
Altcoin.io’s tests on ETH/BTC atomic swaps, are still in the test stages. However, the preview of Altcoin interface looks good