Atomic Swap. What It Is and Its Importance for the World of Cryptocurrencies

atomic swap

Is the ability to transfer coins that are based on different blockchains without third parties real? In general, yes, it is, but as elsewhere, there are pitfalls and nuances in this issue. Today we will talk about such a development as an atomic swap, we will learn how it works and what prospects it has.

Contents:
(please click the topic to scroll down to it)

  1. What is an atomic swap?
  2. How does it work?
  3. Prospects for the future
  4. Conclusion

1. What is an atomic swap?

Recently, the cryptocurrency community has been discussing a new and truly revolutionary idea that can transform the industry beyond recognition. Atomic swaps make it possible to conduct trading operations between different cryptocurrencies without using the help of third parties.

In order for the parties to not deceive each other, both transactions are synchronized. If one of the participants suddenly decides to refuse to conduct an exchange operation, the funds will return to their holders.

Test atomic swaps are already functioning; if they prove their reliability, then this will have colossal consequences for the entire cryptocurrency industry. This technology can arrange a total restructuring of orders in the market, up to the complete replacement of the familiar cryptocurrency exchanges. With the help of atomic swaps investors can get full access and control over their own assets.

2. How does it work?

To understand this rather difficult process it is necessary to simplify and have a visual picture in the head. So, let’s take two users A and B. User A is the initiator of this imaginary transaction. To begin with, he creates a place where funds will be stored at the time of the swap, we’ll call it the deposit box or the address of the contract. To open it you need several components:

  • secret phrase (generated by user A);
  • electronic signature of user B.

In order for user B not to be able to collect money ahead of time, user A should never transfer a secret phrase-number to him, but hash it in advance. Hash is the encryption of any data; blockchain, in principle, works on its basis.

After that, the user B has the opportunity to view the cell and make sure that there is the required number of coins; then B creates its contract address based on the hash of the A user’s cell. Both of these cells can be opened using the same key. Then there is the final stage of the transaction, when A signs cell of B and redeems the funds bound to the wallet. Secret phrase-number is transferred to B and that one can open the cell in which reserved funds of user A are kept. This completes the transaction.

3. Prospects for the future

As we already mentioned above, based on the technology of atomic swaps, it is possible to create absolutely decentralized exchanges, which will be impossible to crack or compromise. If Charlie Lee and the team are able to solve a number of problems and bottlenecks in this technology, then this will be a real revolution in the cryptocurrency industry. At this point in time, the technology works only with such coins:

  • Litecoin;
  • Decred;
  • Bitcoin;
  • Viacoin;
  • Vertcoin.

It should be noted that the source code of this technology is in the public domain, for this reason, any developer, if desires, can introduce it into his offspring.

4. Conclusion

Atomic swap is a truly revolutionary idea, which excites the minds of many participants in the cryptocurrency market. A successful scenario of this direction will change the industry forever: new services will appear, coins will become more flexible type of assets, and users will have full control over their own funds.

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Cryptopia Got Hacked, Crypto Exchange Is Suffering “Significant Losses”

One of the best crypto exchanges of New Zealand, Cryptopia, was hacked. It announced this sad news via Twitter stating that it had experienced a security breach that ended in a “significant loss”. However, the company did not mention any figures of the loss.

Cryptopia has suspended all the activities on the trading platform for an indefinite period. In addition, it has notified the authorities of the country, and now it cooperates with the police and the country’s High Tech Crimes Unit in order to investigate the hacker attack.

“Staff then notified and involved the appropriate Government Agencies, including NZ police and High Tech Crimes Unit who are jointly and actively investigating the matter as a major crime and they are assisting us with advice,” the exchange stated.

This is the first cryptocurrency exchange theft in 2019, however, many customers of different crypto exchanges call into question the security of them, as there were so many incidents that had to teach exchanges how to deal with it. Some users even blame the exchanges, in particular Cryptopia, in a bear market “exit strategy”.

We remind you

The Hackers of the “51% Attack” on Ethereum Classic Returned Half of the Stolen Funds

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Cryptocurrency Prices Today, January 15: Cryptocurrency Is Trying to Regain Its Positions

Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Litecoin, Cardano, Stellar, IOTA, Dash, Monero: Cryptocurrency prices

According to the Coin360 online platform, Bitcoin (BTC) gained 2.9% over the past 24 hours. The price at the time of writing is $3626 per coin, but it remains quite volatile and changes the value.


The rest of cryptocurrencies are also in the green zone:

Bitcoin Cash added 4.99% over the past 24 hours and costs $133 per coin;

Ripple plus 4.58%, and is $0.33 in value;

EOS added 10.17%, and its price is $2.51;

Litecoin became more expensive by 6.66%, and its rate is $32;

Cardano grew by 5.85%, and its value is $0.043;

Stellar added 5.15% and costs $0.11;

IOTA gained 4.92%, and its cost $0.31;

Dash added 2.19%, and its price is $73;

Monero increased by 8.22% and is $46 in price.


Ethereum added 10.5% over the past day. The cost of the coin is $130.

The total market capitalization is $123 billion. Bitcoin accounts for 52.4% ​​of the total volume. In monetary terms, this is $64 billion.

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The Hackers of the “51% Attack” on Ethereum Classic Returned Half of the Stolen Funds

The alleged organizer of the “51% Attack” on the ETC network transferred back $ 100,000 to Gate.io. bitcoin exchange. It was stated by its representatives on their Twitter account:

As a result of the attack, the users of the Hong Kong Stock Exchange had lost about 46,000 ETC. The representatives of the exchange were going to recover the money lost at their own expense.

However, last Saturday, Gate.io reported that an unknown hacker returned about half of the stolen funds. The company tried to contact the hacker. So far, the reasons he returned the funds have not been clarified since the hacker have not responded.

The representatives of the exchange guessed that if the organizer did not seek to profit, it could be a white hacker who wanted to remind people of the risks. Gate.io also noted that the current hashrate of the ETC network is not high enough, which means that the attack might happen again.

Now a successful transaction in the Ethereum Classic network on Gate.io requires about 4000 confirmations. The exchange is confident that this measure will enhance security and recommends other crypto platforms to stick to such measure to protect traders.

We remind you that despite the significant losses of the Gate.io users, the hackers used a simple hacking algorithm:

«Атака 51%» на Ethereum Classic: полный анализ взлома

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Cryptocurrency Prices Today, January 14: Cryptocurrencies Are in the Deep Red Zone

Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Litecoin, Cardano, Stellar, IOTA, Dash, Monero: Cryptocurrency prices

According to the online platform Coingecko, Bitcoin (BTC) lost 2.2% over the past 24 hours. The price at the time of writing is $3520 per coin.

Cryptocurrencies continue to decline rapidly:

Bitcoin Cash lost 7.08% over the past 24 hours and costs $125 per coin;

Ripple lost 2.31% and costs $0.32;

EOS minus 4.08%, and its price is $2.33;

Litecoin minus 7.92%, and its cost is $30;

Cardano dropped by 6.85%, and its value is $0.040;

Stellar fell by 4.42% and costs $0.10;

IOTA lost 7%, and its value is $0.29;

Dash decreased by 2.79%, and its price is $71;

Monero fell by 2.02% and costs $44.


Over the past 24 hours, Ethereum has lost 6.03%. The rate of the coin is $118.
The total market capitalization rose to $118 billion. Bitcoin’s share is 52.8% of the total volume. In monetary terms, this is $62 billion.

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The CEO of Circle Believes That a Clearer Policy of the SEC Will Cure the Crypto Industry

The CEO of the project Circle, backed up by the major bank Goldman Sachs, Jeremy Allaire started a thread on Reddit together with his co-workers, where they debated the accomplishments of the company in the recent time, talked about prospects for the future and discussed the overall situation on the crypto market.

According to the representatives of Circle, one of the main issues with crypto in the US is the lack of regulatory framework and, most importantly, the inability of the Securities and Exchange Commission to clearly define cryptocurrencies as belonging to a particular type of assets.

We remind you:

The SEC: Unlike ICO Tokens, Bitcoin and Ethereum Can Not Be Securities

There absolutely needs to be more regulatory clarity to really make this fly — in particular around who can issue these, how they can be stored and transmitted, and what markets can allow their trading. There’s a lot of attention on this and we absolutely expect to see these issues resolved and for far more real world experiments to hit the markets this year,” said Jeremy Allaire.

Also, the CEO of Circle claimed that the US should follow the example of France and have a separate kind of taxation for crypto-to-crypto transactions.

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Cryptocurrency Prices Today, January 11: Cryptocurrencies Continue to Decline

Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Litecoin, Cardano, Stellar, IOTA, Dash, Monero: Cryptocurrency prices

According to the online platform Coingecko, Bitcoin (BTC) lost 3.3% over the past 24 hours. The price at the time of writing is $3632 per coin.

Cryptocurrencies are still in the red zone:

Bitcoin Cash lost 7.48% over the past 24 hours and costs $132 per coin;

Ripple lost 4.85% and costs $0.33;

EOS decreased by 8.12%, and its price is $2.47;

Litecoin fell by 11.1%, and its cost is $35;

Cardano lost 8.24%, and its value is $0.044;

Stellar dropped by 8.12% and costs $0.10;

IOTA lost 5.53%, and its cost is $0.31;

Dash became cheaper by  4.46%, and its price is $74;

Monero fell by 4.32% and costs $46.

Over the past 24 hours, Ethereum lost 6.81%. The exchange rate of the coin is $128.
The total market capitalization rose to $123 billion. Bitcoin accounts for 52.3% of the total volume. In monetary terms, this is $64 billion.

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