- An atomic swap protocol that swaps Monero and Bitcoin has been created by a Moenro developer
- Atomic swaps allow users to trade peer-to-peer without a third party
- The protocol can be used among many cryptocurrency pairings
A Monero developer has created the first atomic swap protocol between Monero and Bitcoin. The developer, who only goes by username h4sh3d, published a paper last week that discussed how he was able to achieve the feat. Atomic swaps enable individuals to directly trade with one another wallet-to-wallet without an exchange conducting the transfer and represent the next generation of cryptocurrency transactions.
No Exchange Required
The new protocol allows participants to achieve an atomic swap between Monero and Bitcoin “without trusting any central authority, servers, nor the other swap participant”. Reassuringly, the design of the protocol ensures that the involved parties’ funds “are not at risk at any moment” as the coins remain in the users’ wallet and are not transferred elsewhere first.
Despite a Monero-Bitcoin atomic swap being the subject of the paper, the author says that the protocol can be “generalized for any cryptocurrency that fulfils the same requirements as Monero to any other cryptocurrency that fulfils the same requirements as Bitcoin”, suggesting that the principles could be applied market-wide.
Atomic Swap Technology Set For Further Adoption?
The paper imagines a scenario where two individuals have agreed to swap Monero for Bitcoin and have agreed a price in advance, although the negotiation can be integrated into the protocol by third-party software that performs swap services without getting involved in the transfer. The protocol has only two possible executions – either both individuals get the agreed amount of cryptocurrency each or the transfer is cancelled. This ensures that neither individual can try and cheat the other out of their part of the transfer.
The atomic swap process, which uses zero-knowledge proofs at the start of the transfer to ensure that it is trustless, is in many ways the epitome of the cryptocurrency narrative – the ability to freely, privately, and securely transfer money without having to rely on a third party to facilitate it. Atomic swap exchanges do exist, but the technology is still in its infancy and currently requires more in-depth understanding of cryptocurrencies in order to utilize them, although this may change in the future.
