Atomic exchange crypto is often seen as a revolutionary new technology or idea that has the ability to transform financial systems in the next years. According to the experts, the deployment of Atomic Swap on a larger scale might also affect the current state of money transfers.
It is a novel technology that enables anyone to move or trade currencies on or off the blockchain without the need for an intermediary or exchange. Transfers are limited to wallet-to-wallet to simplify and expedite the process.
What is Atomic Swap?
It is a smart contract or smart contract technology, that permits the exchange of one cryptocurrency for another between two or more parties without the need for a centralized exchange.
This indicates that no centralized middlemen are required for bitcoin trading or swapping. The atomic exchange may be executed between two blockchains with distinct native currencies, or it can be implemented off-chain. This indicates that you are no longer reliant on the blockchain. Therefore, it is also known as cross-chain trade.
How are Atomic Swap and Exchange Different?
Let’s compare Atomic Swap and Exchange in order to assist readers in better comprehending both concepts.
Atomic Swap – Low transaction fee
Crypto Exchange – Usually, high fees and hidden charges involved.
Atomic Swap – Instant transactions
Crypto Exchange – Need to create an account, validate or confirm your transaction, depositing coins, withdrawal processing, and other steps take time.
- Intermediary Token
Atomic Swap – No need to buy an intermediary token.
Crypto Exchange – In most cases, need to buy an intermediary token like Bitcoin to trade between less-known cryptocurrencies.
Atomic Swap – Decentralized
Crypto Exchange – Centralized
Atomic Swap – A Safe transaction between two parties.
Crypto Exchange – Exchanges are open to regulations as well as hacks and online attacks.
Is there anything you can’t do with atomic swap?
Atomic Swap is a notion that is currently developing and in its infancy. Therefore, there are restrictions that professionals continue to address. Here are several major concerns about atomic swaps.
Due to the requirements of each cryptocurrency for Atomic Swap, you cannot currently utilize Atomic Swap for all cryptocurrencies.
Additionally, cryptocurrencies must have particular programming capabilities.
There are currently few coins that satisfy the aforementioned criteria. This restricts the number of coins that may be used for Atomic Swaps.
It seems that further time is required before this technology can become widespread.
- Inability to Handle Large Volumes of Data Speed
It is a benefit of Atomic Swaps, but not when transferring large amounts of currency. There are still more improvements to be made before it will be quick enough for bigger data sets as well.
- Not Complementary Enough
Some wallets do not support Atomic Swaps. However, the number of wallets that are presently compatible with Atomic Swaps is expanding, and others are aiming to implement atomic swap technology, but it will be some time before the technology becomes ubiquitous.
Currently, a relatively small number of wallets can enable Atomic Swaps. One of the most popular wallets for Atomic Swaps is Atomex – a multicurrency HD wallet with a built-in hybrid atomic swap exchange.
Overall, the technology as it stands seems to need further time to become the primary rival of crypto exchanges or to enter the public. Until then, we may have to wait for a little longer.
Moreover, Atomic Swaps cannot be used with cryptocurrencies that do not support smart contracts.