Atomic Cross-Chain Swaps for Direct Cryptocurrency Trading

Summary

This article reviews atomic swaps as a protocol for direct wallet-to-wallet trades between different cryptocurrencies. It presents interoperability and scalability as obstacles to broader use of cryptocurrencies and colored tokens, and describes atomic swaps as a way to exchange assets across otherwise separate networks without relying on a conventional centralized exchange.

The paper surveys relevant literature and technology, then examines how atomic swaps operate, how the market has developed, what advantages the facilities may offer, and what challenges remain. The provided description does not specify particular swap mechanisms, adoption measures, market data, or empirical trading results. It therefore serves as an overview of the technology and its potential rather than evidence that atomic swaps are broadly available, liquid, or suitable for a particular trading strategy. For traders, the subject is relevant to cross-chain exchange design and the practical limits on direct cryptocurrency exchange.

Key ideas

• Atomic swaps enable direct wallet-to-wallet exchange between different cryptocurrencies.
• The article frames interoperability and scalability as barriers to cryptocurrency adoption.
• It reviews the technology, literature, market development, potential advantages, and outstanding challenges.
• The provided description offers no quantitative evidence about adoption, liquidity, or trading performance.

Tags

# Atomic Cross-chain Swaps: Development, Trajectory and Potential of Non-monetary Digital Token Swap Facilities


# Atomic Cross-chain Swaps: Development, Trajectory and Potential of Non-monetary Digital Token Swap Facilities









Since the introduction of Bitcoin in 2008, many other cryptocurrencies have been introduced and gained popularity. Lack of interoperability and scalability amongst these cryptocurrencies was and still is, acting as a significant impediment to the general adoption of cryptocurrencies and coloured tokens. Atomic Swaps, a smart exchange protocol for cryptocurrencies, is designed to facilitate a wallet-to-wallet transfer enabling direct trades amongst different cryptocurrencies. Since swaps between cryptocurrencies are still relatively unknown, this article will investigate the operation and market development thus far and query the advantages they offer and the future challenges they face. The paper contains detailed literature and technology reviews, followed by the main analysis and findings.

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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.