Atomic Swaps: Smart Contracts to Bless Crypto Traders
Atomic swaps are automated smart contracts that allow crypto traders to exchange assets from different blockchains.
An atomic swap is the definition of a dream come true, specifically for crypto traders or users within the blockchain community.
Also known as a cross-chain swap, it enables traders to exchange cryptocurrencies between blockchains as easily as trading Pokemon cards with a friend.
Atomic swaps are automated smart contracts that provide a secure transaction by preventing a party from stealing another’s assets.
Now, traders can easily exchange their BTC into LTC safely and, most importantly, without fees.
Let’s get more details about atomic swaps and how they work between blockchains.
What is Atomic Swap?
Each cryptocurrency works within its blockchain, which only supports transactions in specific tokens.
To clarify, Bitcoin has its blockchain, and so do Ethereum, Tether, and other cryptocurrencies.
Suppose you only own Bitcoin but need Ethereum for a transaction.
In that case, you no longer need to convert money to buy the currency you need.
The atomic swap comes in handy to help users exchange cryptocurrencies in one trade.
To sum it up, an atomic swap is an automated smart contract that enables two parties to exchange cryptocurrencies from different blockchains.
How an Atomic Swap Works
Users can perform an atomic swap using specific digital wallets and Hash Timelock Contracts (HTLC).
The two technologies create a secure environment and carry out the process upon agreement from both parties.
For example, you want to convert 50 BTC to a certain number of LTC with your friend Alice.
First, you submit the transaction through a wallet and receive a hex number as encryption to this process.
At Alice’s end, she also undergoes the same process.
Using the encrypted numbers, Alice and you must unlock funds within a limited time frame.
If both parties successfully do the process, HTCL then performs the trade.
On the contrary, if either Alice or you fail to unlock funds within the time frame, the transaction is then automatically canceled.
More Things You Need to Know About Atomic Swap
An atomic swap or a cross-chain swap is only possible through decentralized exchanges and digital wallets that support the process.
So, some crypto wallets may not support this exchange due to specific conditions.
In previous years when cross-chain swaps were still less familiar, traders did the exchange through decentralized networks like Lightning Network and open-source software like COMIT.
But now, you can find more digital wallets that support this particular exchange, such as Atomic wallet, Liquality, ONTO wallet, Wirex, and XDEFI Wallet.
Watch our Video about Atomic Swap
Breadnbeyond proudly presents animated explainer videos to help you understand more about atomic swaps.
The videos below have different animation styles, but all are interesting to watch.
Video 1
From the beginning, you can see the appealing visuals and bold colors. Every graphic and illustration visualizes the topic being mentioned.
Also, we can’t deny the seamless transitions that successfully deliver and bring all of the objects together flawlessly.
Video 2
You can see colorful 2D animations right from the start giving you the feel of watching your favorite cartoons.
Not to mention, the joyful music background and sound effects make the overall video even more fun to watch.
Video 3
Simplicity is much needed when visualizing complex concepts, so audiences can stay away from unnecessary distractions and focus more on the materials.
Moreover, motion graphics, like the video above, is one of the most suitable styles to explain and visualize the concept.
See more: 65+ Outstanding Crypto Video Examples [Best Picks in 2022!]
An atomic swap or a cross-chain swap makes it easier for crypto traders to exchange their cryptocurrencies between blockchains.
Moreover, thanks to automated smart contracts, traders can perform the swap in a secure and trustless ecosystem.
