Atomic Swaps: Giving Power Back to The People
As new cryptocurrency investors flood exchanges to get in on the high returns and quick gains, developers are becoming concerned with crypto’s infrastructure. At this point it has become a cycle and developers have seen all of this before.
First, demand for cryptocurrency spikes up. Second, a tidal wave of new users flood current exchanges. Third, catastrophic failure occurs and millions of dollars are lost through an exchange that was designed to prevent such events.
Good news is that cycles like this can be broken. High profile coders are turning their attention to atomic swaps, a concept that claims to allow for direct, peer to peer transfer of cryptocurrencies across different blockchains. These atomic swaps will act as large repositories of customers money, and can be rendered obsolete by code.
Blockchain developer, Alex Bosworth believes atomic swaps are becoming a necessity in today’s world.
Putting users in control of their own private keys has the best aggregate track record for security despite individual cases of loss. Funds under centralized control on exchanges have led to the most massive security failures we’ve seen.
Atomic swaps are going to be here sooner than you think and in some ways are already here. Jameson Lopp an engineer at BitGo tweeted:
Nearly instant atomic swaps … are coming sooner than everyone thinks. Definitely not a year away, but mere months.
Atomic swaps between cryptocurrencies on the same blockchain occurred more frequent last year, with decentralized exchanges such as 0x and Altcoin.io, allowing instant trades to occur between tokens on ethereum compatible protocols. However, tokens running on different codebases require purpose built tools to allow transfers today.
Off chain swaps will allow trading to be automatic, but the technology to enact atomic swaps like lightning network and Raiden Network are still under development. Although growth and infrastructure are still needed to be built to bring the atomic age, Bosworth is still optimistic that the new era will soon arrive, tweeting “The atomic age is coming, what cannot be swapped will be left behind.”
Giving the keys to security back to the people will prevent large scale catastrophes from occurring but will also act as a blanket of security for individuals whom are frightful that they can be victim to a large scale, hack, attack, or scam.