Cross Blockchain Trades? Lightning Gives New Life to Atomic Swaps

Litecoin for vertcoin anyone? Bitcoin for litecoin?

Say, you want to trade one cryptocurrency for another. How do you do that? You can either find someone you know and trust to do it in person or, a more common scenario, you go through some sort of exchange platform.

Ultimately, the latter involves risk, because it means taking your funds off the blockchain and putting them in the hands of an unknown third party. If the exchange fails, or simply decides to hold on to your money, for whatever reason, you are out of luck.

But Lightning Network, an off-chain scaling solution originally intended for bitcoin, is setting the stage for a decentralized option called atomic swaps.

Also known as atomic cross-chain swaps, the technology essentially allows two people holding tokens on two different blockchains to trade directly – and instantly – without the risk of one party running off with the other’s money before the trade is complete.

That is where the word ‘atomic’ comes in. It means that either the trade happens in its entirety, or it doesn’t happen at all. So, if a node goes offline or Bob reneges on his end of the deal, everyone gets their money back. So far, so good. But there is a

Read more ... source: CoinDesk

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