Hi crypto lovers! Today, I’d like to speak about something that made me think of the days when I traded Yu-Gi-Oh cards: atomic swap crypto technology.
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Remember Swapping Cards?
I sure do. Every time my parents went to the grocery store, I’d ask to buy a new box of Yu-Gi-Oh cards. As time passed, I accumulated an impressive collection. In after-school and school programs I’d get together with other collectors and we’d swap cards in the middle of the night regular ones with uncommon ones, or exchange duplicate rare cards. It was easy, quick and secure.
This story perfectly illustrates the importance of the crypto atomic swap technology can do within the world of crypto.
The Exchange Headache
If you’ve attempted swapping an exchange for another one You’re aware that this procedure isn’t easy. I’ll walk you through my experience recently:
I signed up with Coinbase and had to hand over my Social Security number, my address telephone number, address, as well as pictures – they wanted to get to know more about me than my accountant!
And then I had to pay my Bitcoin with a massive $1 transaction cost. What was the worst thing? The worst part? Bitcoin wasn’t inside my bank account any more – it was in the Coinbase wallet. I had faith in them that they wouldn’t be able to steal or misplace my crypto.
The next step was selling my Bitcoin (another cost) to get cash, later using that money to purchase the cryptocurrency Litecoin (yep there was another cost). After that, I added the coins into my personal account – which triggered yet another network charge.
The entire process was a long time and cost me quite a lot in costs, and demanded to trust a business I hardly had any idea about. There must be an easier method.
Enter Atomic Swaps
Imagine removing the entire unnecessary. This is what atomic swap cryptocurrency is able to do. It’s similar to meeting someone in the digital world and then trading coins in person.
This is how it performed after I tested it:
- I encased my Bitcoin in a specific bit of code.
- Another person also locked their Litecoin in the same password. We had already decided regarding the quantity we were trading so there wasn’t any bargaining.
- After that, as they were given the code for unlocking their new Bitcoin, I got my own Litecoin-specific key. This was similar to two of us launching our trading cards exactly the same time.
- “atomic” or “atomic” part means it can happen exactly the way you want it to or does not happen even once. It eliminated the fear that someone would steal my Bitcoin without revealing their Litecoin.
Behind the Scenes
To my fellow geeks in the tech world Crypto atomic swap technology utilizes an “hashed time lock smart contract.” Don’t let the name fool you away – this is basically an electronic lockbox that has two primary attributes:
- No one gets anything until both parties place their coins into it.
- If someone does not return and we are both credited with the coins we originally used at a predetermined period of time.
I like that there’s no possibility of human mistakes. There is no way for an exchange to be hacked and cause me to lose my funds. There are no surprise charges. No wait time for your transactions to be cleared.
In addition, I did not have to download my driver’s license or provide personal information just to exchange some coins.
Not Perfect (Yet)
In my studies I found out that Atomic swaps come with some restrictions. Both currencies must use the same algorithm for hashing and allow the same smart contracts. That means that I cannot switch any cryptocurrency by using this method – at the very the very least, not at this point.
However, technology is changing rapidly. The things that atomic swap crypto is able to achieve today is just the first step of what it’ll achieve in the near future.
Why I’m Excited About Atomic Swaps
After both approaches and experimenting with both, I’m now all for cryptocurrency atomic swap technology. Here’s why:
- I’m fed up with having to pay ridiculous charges for exchange.
- I’ve been worried about hacks to exchange.
- I do not want to wait all day for transactions to be cleared.
- It’s time to end my tale to exchange a few coins.
Atomic swap crypto can be described as what I’ve been wishing for. This is bringing us closer to truly decentralized trade which is what the crypto industry was designed to function.
Take a look at it this way: the cryptocurrency industry was designed to eradicate middlemen in the process of financial transactions. However, somehow, we have ended up with central exchanges, which are essentially digital banks. The technology of crypto atomic swap takes us back to where crypto started, that is, person-to-person trades with no one involved having a say or control over our funds.
The next time you think about the conversion of some of your crypto assets, think about the possibility of an atomic swap cryptocurrency. Your wallet (and your security) will appreciate it.
Similar to trading Yu-Gi-Oh cards on the playground, the cryptocurrency market should be straightforward, simple and trustworthy. The technology of atomic swaps in cryptocurrency has finally made it possible.
