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Welcome to the Atomic Swap Wallet wiki!
You can view the testnet Atomic Swap Wallet live here: https://swap.altcoin.io/
Atomic swaps give the crypto community a safe way to trade across different blockchains, quickly and with minimal fees. Although not a new idea — bitcointalk forumites debated them in 2013 — the technology has overcome some big hurdles in the last few months, with several successful real-world tests (including one of our own).
We believe atomic swaps are an important key to decentralized trading where you are fully in control of your tokens at all times. So we’d like to share how they’ve evolved, their potential, and why they’ll change how you trade for the better.
To give a very simplistic explanation. Two parties who are going to engage in atomic swaps decide on a shared secret. The two parties will share their cryptos if and only if their secrets match. So, this way, if somebody else barges into this exchange, they won’t be able to get their hands on any of the coins because they will not know this secret.
Ok, so now you know the concept, but how does it actually work?
In order to execute this, something known as Hashed Timelock Contracts or HTLCs are used. If you are familiar with the lightning network then you should know how hashed timelock contracts work. Right now we will just give you a brief description of what hashed timelock contracts are.
What is an atomic swap?
An atomic swap is atomic in the sense that if the swap isn’t successful, neither party loses out. The swap takes place or it doesn’t — there are no half measures. There are two kinds of atomic swap: on-chain and off-chain. On-chain swaps are great, but off-chain swaps take this concept to another level as they’re nearly instant, private, and require almost zero fees.
Both kinds use hashed-time-locked-contracts, or HTLCs. These ensure that neither party can take the offered funds without first offering their own. For example, let’s assume Alice and Bob want to exchange BTC for ETH. Alice sends her BTC, Bob sends his ETH, and each declares receipt of their new coins by confirming a cryptographic code, issued by the HTLC. If neither or only one of them confirms the code within a set timeframe, both sets of coins return to their original owners and the exchange is canceled.
“Cross-Chain Atomic Swaps, where you can swap currencies from two Blockchain’s with two transactions that are trustless, and where neither participant can cheat, means that we could see many more decentralized cryptocurrency to cryptocurrency exchanges. So we’ll see how that happens. I think that will be really interesting.” — Andreas Antonopoulos
Start with setup instructions here: https://github.com/AltCoinExchange/altcoin-atomic-trading-platform/wiki/Setup-Instructions