Atomic Swap

Atomic Swap refers to a technology that enables the exchange of one Cryptocurrency for another without the need for a centralized exchange. This is done through Smart Contracts that ensure the transaction occurs only if both parties fulfill their agreed conditions, making it secure and Trustless.

For example, if Alice wants to exchange Bitcoin (BTC) for Litecoin (LTC) with Bob, they can initiate an atomic swap. They create a smart contract that locks the BTC in an Escrow until Bob provides the agreed amount of LTC. If Bob fails to send the LTC within a specified time, the BTC is returned to Alice. If Bob sends the LTC, the smart contract reLeases the BTC to him.

Cases of atomic swaps include:

• Cross-chain swaps: Exchanging BTC for LTC directly without an intermediary.
• Decentralized exchanges: Facilitating trades between various cryptocurrencies while maintaining user control over funds.
• Peer-to-peer transactions: Allowing users to trade cryptocurrencies directly with each other, enhancing privacy and reducing fees.