Atomic Swap

An Atomic Swap is a technology that allows two parties to exchange different cryptocurrencies directly, without the need for an intermediary or centralized exchange. This process occurs through a smart contract that ensures both parties receive their assets at the same time, making the transaction secure and trustless.

Atomic swaps enable peer-to-peer trading between different blockchains, such as Bitcoin and Litecoin, by using a feature called Hash Time-Locked Contracts (HTLCs), which ensures the safety and fairness of the exchange. These swaps allow users to bypass the risks associated with third-party platforms, keeping control over their assets throughout the transaction.

Why Atomic Swaps Matter

Atomic swaps promote decentralization by allowing cross-chain transactions to occur without relying on centralized exchanges. They help reduce fees and increase privacy, as they don’t require personal information or third-party oversight.