HomeFinance

Is Atomic Swap Really the Future of Blockchain Technology?

Atomic swap has been doing the round for quite some time due to its revolutionary properties. The reason for such notoriety is its potential to change the financial system in the preceding years. If this strategy is implemented on a larger scale, there are chances that it can impact the number of transactions that take place in the present time. It is the latest technology that allows anyone to transact with each other or do trading even with us without the presence of blockchain, an exchange or even a mediator. The transfers made in this process are wallet-to-wallet, which makes the transaction and transfer so much faster as well as simple for the users. In order to see more, you can visit bitcoin-eraapp.com.

Introducing Atomic Swap:

To make it simpler to understand, this technology has constituents of smart technology in it. This means that a person can exchange in a cryptocurrency without the need of any exchange that possesses centralised control of any authority. They are automated in their functioning, and exchanges can be made through peer-to-peer mode.

The reason for bringing this technology into existence is for making exchanges without the involvement of any other party. Before the year 2017, there was no scope for making cryptocurrency transfers without any exchange. Crypto exchanges like CoinMarketCap, Kraken etc. existed to facilitate the transaction that was made in any cryptocurrency.

A Brief History Of Atomic Swapping

People have been working for the most part on the notion of a distributed cryptocurrency exchange or a permissionless trade since the beginning of blockchain and digital currency. Its first draft was brought into existence by Sergio Demian Lerner who authored it in the year 2012. However, in the beginning, time this notion was not that famous and did not get the notoriety that it has today. This technology got its first break in the subsequent year 2013 when Tier Nolan gave the earliest detailed explanation regarding atomic swaps and outlined how they function. This is why, even though Lerner wrote the original text, Nolan is credited as the originator of Atomic Swaps.

Why Need for Atomic Swap Was Felt:

If we begin with this, we would get to know that the process of the transaction on a blockchain is perplexing as well as consumes a lot of time. This is probably one of the main reasons why the atomic swap’s need was felt. It too helps in bringing the cryptocurrency to the mainstream area. Online exchanges, often referred to as virtual currency transactions, are what we utilise. Investors and traders may acquire, transfer, and trade virtual currencies on more than 200 centralised exchanges.

Atomic Swap’s Advantages

  1. Since we know that whenever we talk about cryptocurrencies, they are so famous is the reason people call them centralised. But in a true sense, the exchanges do not make the process a decentralised one. Hence, the atomic swap has come into existence to make digital transactions entirely a decentralised process.
  2. It offers increased security to the users while transacting.
  3. There is shared trading that takes place within the parties.
  4. The costs for making such a transaction are as well very low.
  5. There is increased flexibility when it comes to trading in alternative coins since many exchanges are facilitating exchanges only with reputed cryptocurrencies.

Conclusion

Since there is so much buzz that goes around cryptocurrencies being decentralised, the atomic swap has come into existence to actually mean what decentralised exchanges look like. I wish to have imparted to you an important piece of information with the help of this blog.