Today’s article is dedicated to Atomic swap technology, a smart contract that allows to directly exchange one type of crypto asset with another without the assistance of a mutually trusted intermediary party. Today as well, Qtum deployed atomic swap technology on their mainnet. TLDR; Imagine Alice wants to exchange her QTUM into BTC. Lucky for her, Bob is looking to buy QTUM. However, as the QTUM and Bitcoin blockchain are not related to each other, either party can cheat and just disappear with the funds. Use Case; Before the introduction of Atomic Swap technology, you could find many escrow offers on the famous BitcoinTalk forum from third parties who acted as a mean of trust between Alice and Bob. Again, trust issues could arise with the escrow agent, so the best solution was to reveal their identities one way or another which affects their privacy. Therefore, Atomic Swap technology is created to solve the above issue. Basically, a time-locked smart contract is created that allows both parties to deposit their corresponding funds. Time-locked smart contract; The contract contains an output that is spendable by either party, but the rules required for redemption are different for each party involved. One party generates a secret and pays the intended trade amount into a contract transaction. The contract output can be redeemed by the second party as long as the secret is known. If a period of time (typically 48 hours) expires after the contract transaction has been mined but has not been redeemed by the participant, the contract output can be refunded back to the initiator’s wallet. If both deposits are successful, the tokens will be swapped and anonymity is maintained. Under the hood; Blockchain platform Qtum is introducing Bitcoin ( ) atomic swaps to its mainnet infrastructure, according to a press release shared on Jan. 9. This development will allow users to swap QTUM into BTC without any meditating third party. Qtum used a fork of Decred’s to accomplish this. The code was initially intended for Decred to perform cross-chain atomic swaps between Decred and various other cryptocurrencies. Qtum Deploying Atomic Swaps; BTC code Zero Value UTXOs In brief, Qtum is working on a draft to allow Person A to make a contract call without owning any Qtum. Doing so, this means that Person B is paying for the fees for the contract call transaction. This holds a lot of value as users are enabled to interact with Qtum DAPP’s without having to own QTUM. Added to that, Person A is still the owner of the transaction. Sending a transaction while having 0 Qtum in your account is not possible as the transaction would never be broadcasted. Therefore, Qtum came up with a workaround where an external address is used that holds a bare minimum of Qtum to pay for the transaction fee. This address is added to the UTXO to cover for the transaction fees. It’s a simple solution, with a large impact. Tech Details; (Reference article by Alexis) What is the importance of Atomic Swap technology? Jordan Earls, Qtum co-founder and lead developer insisted on answering this question: “Third-party dependency in transactional scenarios presents a hurdle that slows us from achieving complete decentralization. Atomic swaps enable us to get past that barrier, while still maintaining a level of trust and fidelity that in some cases, may rival that of exchanges. This also means that users will have an easier time onboarding themselves to the Qtum mainnet, by way of using Atomic Swaps as a means to procure Qtum tokens.” With atomic swaps you don’t need to go through middlemen in order to exchange different types of coins in a p2p manner. This is considered to be the future of decentralized exchanges and a crucial part of transactions in a “token world”. It allows BTC holders to easily access and use dApps based on QTUM. Also, any coin that enables atomic swaps with Bitcoin will now be able to easily deploy atomic swaps with Qtum, thereby allowing its community same said access. In short; : Benefits Stimulate adoption and remove entry barriers for dapps users No need to own Qtum in order to interact with DApps Increase decentralization Removal of middlemen More privacy, lower cost Further Reading Material There’s a lot of information to be found about Atomic Swap technology, I’ve selected a few outstanding pieces: Blockgeeks has created an in-depth how Atomic Swaps work technically under the hood. article Atomic Swap (Decred) Source code

Chain

Dapp

fees

Meet the IFTTT of Blockchain Technology

Solving Blockchain Performance — 5 Promising Solutions

Let's chat!

My (docs) website

Nominated for 2022 - HackerNoon Contributor of the Year - Nft

Too Long; Didn't Read

Qtum Atomic Swaps — Zero Value UTXOs

Qtum Atomic Swaps — Zero Value UTXOs

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

5 Essential Tips To Get Started With Growth Hacking

(1/100) Crypto Countdown: Golem

A Research Report on the Trader $JOE DeFi Platform

07/03/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

01/06/2018: Biggest Stories in the Cryptosphere

5 Essential Tips To Get Started With Growth Hacking

(1/100) Crypto Countdown: Golem

A Research Report on the Trader $JOE DeFi Platform

07/03/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

01/06/2018: Biggest Stories in the Cryptosphere

Light-Mode

Classic

Newspaper

Minty

Dark-Mode

Neon Noir

Minty

HN StartUps