What's going on: The big advantage of cryptos is the use of a decentralized, distributed ledger, that makes it impossible to hack or change a running blockchain (except doomsday scenarios like a 51% attack of course). But here's the catch: We trust crypto because of it's decentralized, immutable technology and yet have to use centralized, hackable exchanges like Kraken, Binance or GDAX who remain a single point of failure.
But there is hope: Atomic Swaps will allow the exchange of one cryptocurrency for another cryptocurrency without the need for a trusted third party. Jameson Loop, BitGo engineer and Twitter-celebrity, tweeted some days ago: "From a recent conversation I had with someone who is building it: 'Nearly instant atomic swaps via Lightning Network are coming sooner than everyone thinks. Definitely not a year away, but mere months.'"
Some cases of Atomic Swaps are already here: The first on-chain atomic swap transaction occurred on 1 October 2017 between Decred and Litecoin. In November 2017, the first off-chain atomic swap between Bitcoin and Litecoin happened. There even is a handy site called swapready.net, where you can check the development of Atomic Swaps.
But there are still obstacles in the way. Elizabeth Stark, CEO of Lightning Labs, recently discounted the hype, writing on a development channel, "Anyone telling people that Lightning swaps will be ready in months doesn't know what they're talking about." And in interview with CoinDesk, Stark said: "There's still a good amount of infrastructure to build."
Why should I care: Atomic Swaps between Bitcoin and Ethereum for example would be a big deal: the two blockchains could communicate with each other in a trustless way. This means that users could have an ERC-20 bitcoin on the ethereum blockchain, pegged one to one with bitcoin on the bitcoin blockchain. This could not only put the potential of both Blockchains a huge leap forward, but would also strengthen their dominance in the market.
It's possible that we see some Blockchains interacting with each other in 2018. But it will take a while for it to really take off, so 2019, 2020 or even 2021 are safer bets for Atomic Swaps to get really mainstream.
Source: coindesk.com, hackernoon.com
GIF: giphy.com
Want to get essential news on Cryptocurrencies and everything Blockchain for free? Subscribe to Cryptomizer, the daily newsletter with the most essential news on Bitcoin and everything blockchain.