One answer to improving cryptocurrency trading security: atomic swaps. Una respuesta para mejorar la seguridad del comercio de criptomonedas: intercambios atómicos

LeoFinance
20 days ago
(edited)
10 Min Read
2041 Words

5E2CA733607F440D88608081A086DF18.jpeg

This post is in English and Spanish. La publicación está en inglés y español.

The paradox of decentralized cryptocurrency and centralized cryptocurrency exchanges.

When I first learned about Bitcoin, I had to learn about the blockchain, cryptocurrency and one of most important aspects of cryptocurrency has always been control of your cryptocurrency. The presence of your cryptocurrency in your cryptocurrency wallet and your possession of your private keys guarantees this control and the safety of your cryptocurrency. Ironically, this movement founded on this concept where you controlled the keys to your wallet and thus you controlled your cryptocurrency, has always had centralized exchanges.

Not your keys, not your cryptocurrency

If you exam the large exchanges like Coinbase, Binance, Bittrex and others, they are centralized. This means they are run by a small group of people who make the rules. And in order to trade cryptocurrency tokens you must surrender your cryptocurrency tokens to them and you must trust them to return your property. Now your cryptocurrency no longer resides in your wallet, under the control of your private keys. Now your cryptocurrency resides in the exchange wallet, under the control of their keys.

Because of this the exchange now has control of your cryptocurrency. This is not immediately apparent, but becomes apparent if the exchange freezes all trading or if the exchange just freezes trading of your particular tokens wallet. If this happens you can't trade your cryptocurrency tokens. You can’t sell your tokens and you can’t move them.

You then have to wait until they say you can have them, and sometimes they say how much, when and what you can do with them. This sudden and complete loss of control clarifies exactly who controls your cryptocurrency deposited on a centralized exchange. In addition, when this happens you truly understand that a centralized exchange controlls your cryptocurrency as if it’s nit really yours. Plus you understand the importance of an alternative type of exchange, a decentralized exchange, where you don’t surrender control of your tokens.

Decentralized exchanges

After years of only centralized exchanges the "DEXS" or decentralized exchanges appeared. Uniswap, Justswap and others are more decentralized then the first generation of exchanges, but they still require your cryptocurrency to leave your wallet and be stored on the exchange wallet, so you can swap tokens, and contribute liquidity to liquidity pools.

Atomic Swaps

Like the fables or tales of unicorns, another technology promised true decentralization of exchanges. This unicorn-like technology was called an Atomic Swap. It was described as the solution to the centralized exchange.

In general terms, atomic swaps allow you to exchange your cryptocurrency for someone else’s cryptocurrency without moving your crypto-currency to an exchange wallet, where it’s no longer in a wallet under your control, but in an exchange wallet under their control.

In an Atomic Swap you trade cryptocurrencies in a trustless fashion, from peer to peer and wallet to wallet, by interfacing your wallets with a smart contract, into which both parties input the details of the trade, the smart contract verifies the existence of the cryptocurrencies involved in the proposed trades and once both parties agree to the terms and consent to the swap, the cryptocurrencies are exchanged.

As you can see, your cryptocurrencies stay in your wallets until the trade deal is agreed to and appropriate wallets exist on each side and then they are exchanged. So you never surrender control of your cryptocurrency until the actual cryptocurrency trade or exchange occurs. And the cryptocurrency never resides on an exchange only your wallet and the wallet of the person you are trading with... true decentralization.

A Unicorn

Yes, just like a unicorn, I found a functional decentralized exchange doing atomic swaps! Just like the unicorn, this mythical beast was often spoken about but never seen. But now has been found. Plus it is in use by very notable projects like #Bitcoin, #Bitcoin Cash, Dash and #Litecoin. Yes these three coins are one of the 100 coins which has completed the Integration Process and now can be swapped via an atomic swap.

XBridge: an atomic swap solution.

I learned of a product called XBridge, created by Blocknet.io and according to the website documentation Blocknet’s XBridge is capable of atomic swaps with over 100 different cryptocurrency projects. These cryptocurrency projects include #Bitcoin, #Bitcoin Cash, #Dash and #Litecoin.

XBridge a true decentralized Exchange and order book.

XBridge performs a decentralized wallet to wallet exchange or swap using the atomic swap technology. X-Bridge approaches each of the four main components of an cryptocurrency exchange a decentralized fashion (in the words of Blocknet.co developers):

Storage of Funds

  • Trading is non-custodial and occurs directly out of the client's wallet. Funds remain within the client's control throughout the entire process.

Order Books

  • Orders are broadcasted directly peer-to-peer over the network. Each client compiles the order book themselves instead of relying on a central order book service. All integrators and services on the protocol share the orderbook and liquidity. Currently there is just support for a public order book, but there are plans for private order books and direct trading as well.

Order Matching

  • This is performed peer-to-peer by the clients.

Settlement

Blocknet.co has additional products

Blocknet has been working on the problem of centralization of exchanges and centralization since 2014. It created a product which performs atomic swaps called XBridge. This product is a dApp, but it works on a network, not a blockchain. You see BLocknet.io is not just working on a dApp, they are working on a phenomenal concept called the interchain which is revolutionary network, not controlled by anyone and open to everyone. This product is called XRouter.

XRouter

The interchain product X-Router is a decentralized communication layer that connects blockchain networks to multi-chain applications.

Blocknet has conceived the notion that cryptocurrency isn't a zero sum game, with one or two blockchains being the winner and all others being loser. Instead Blocknet envisioned a network, open to all, which allowed all blockchains to speak to each other, and all applications on blockchains to be able interact with applications on other blockchains, and buy the goods and services of these applications.

The Interwork

Imagine a software platform, similar to the internet connecting webpages, that connects blockchains. Thats right, envision all the blockchains in the cryptocurrency universe, being connected to other blockchains functionally by a network, called the internetwork. And this network allows communication between applications on different blockchains, and the purchase of goods and services between blockchains. And lets take it one step further, these purchases are made with each chains native cryptocurrency tokens, using atomic swaps and multiple asset wallets.

Block net.co
1DA37524D4BE4DAEB4368BAFF62AFC90.jpeg

Details

So there are many more technical details that you can read about on their website. Blocknet.co has created a True decentralized cryptocurrency exchange with atomic swaps. This may be one version of decentralized trading of the future, where people exchange cryptocurrencies from their wallets.

Written by @shortsegments

79B0F291322940B8A9E45956EAC8A688.jpeg

😎

Una respuesta para mejorar la seguridad del comercio de criptomonedas: intercambios atómicos.

La paradoja de la criptomoneda descentralizada y los intercambios de criptomonedas centralizados.
Cuando supe por primera vez sobre Bitcoin, tuve que aprender sobre la cadena de bloques, la criptomoneda y uno de los aspectos más importantes de la criptomoneda siempre ha sido el control de su criptomoneda. La presencia de su criptomoneda en su billetera de criptomonedas y su posesión de sus claves privadas garantiza este control y la seguridad de su criptomoneda. Irónicamente, este movimiento basado en este concepto en el que usted controlaba las claves de su billetera y, por lo tanto, controlaba su criptomoneda, siempre ha tenido intercambios centralizados.

Ni tus claves, ni tu criptomoneda
Si examina los grandes intercambios como Coinbase, Binance, Bittrex y otros, están centralizados. Esto significa que están dirigidos por un pequeño grupo de personas que establecen las reglas. Y para intercambiar tokens de criptomonedas, debe entregarles sus tokens de criptomonedas y debe confiar en ellos para devolver su propiedad. Ahora su criptomoneda ya no reside en su billetera, bajo el control de sus claves privadas. Ahora su criptomoneda reside en la billetera de intercambio, bajo el control de sus claves.

Debido a esto, el intercambio ahora tiene el control de su criptomoneda. Esto no es evidente de inmediato, pero se hace evidente si el intercambio congela todas las operaciones o si el intercambio simplemente congela el comercio de su billetera de tokens en particular. Si esto sucede, no podrá intercambiar sus tokens de criptomonedas. No puede vender sus tokens y no puede moverlos.

Luego tienes que esperar hasta que te digan que puedes tenerlos y, a veces, dicen cuánto, cuándo y qué puedes hacer con ellos. Esta repentina y completa pérdida de control aclara exactamente quién controla su criptomoneda depositada en un intercambio centralizado. Además, cuando esto sucede, realmente comprende que un intercambio centralizado controla su criptomoneda como si fuera realmente suyo. Además, comprende la importancia de un tipo de intercambio alternativo, un intercambio descentralizado, en el que no cede el control de sus tokens.

Intercambios descentralizados
Después de años de solo intercambios centralizados, aparecieron los "DEXS" o intercambios descentralizados. Uniswap, Justswap y otros están más descentralizados que la primera generación de intercambios, pero aún requieren que su criptomoneda deje su billetera y se almacene en la billetera de intercambio, para que pueda intercambiar tokens y contribuir con liquidez a los fondos de liquidez.

Intercambios atómicos
Como las fábulas o los cuentos de unicornios, otra tecnología prometía una verdadera descentralización de los intercambios. Esta tecnología parecida a un unicornio se llamó Atomic Swap. Se describió como la solución al intercambio centralizado.

En términos generales, los intercambios atómicos le permiten cambiar su criptomoneda por la criptomoneda de otra persona sin mover su criptomoneda a una billetera de cambio, donde ya no está en una billetera bajo su control, sino en una billetera de cambio bajo su control.

En un intercambio atómico, intercambia criptomonedas de manera confiable, de igual a igual y de billetera a billetera, al interconectar sus billeteras con un contrato inteligente, en el que ambas partes ingresan los detalles del intercambio, el contrato inteligente verifica la existencia de las criptomonedas. involucrados en las operaciones propuestas y una vez que ambas partes están de acuerdo con los términos y dan su consentimiento para el intercambio, se intercambian las criptomonedas.

Como puede ver, sus criptomonedas permanecen en sus billeteras hasta que se acuerda el acuerdo comercial y existen billeteras apropiadas en cada lado y luego se intercambian. Por lo tanto, nunca cede el control de su criptomoneda hasta que se produzca el comercio o intercambio de criptomonedas. Y la criptomoneda nunca reside en un intercambio, solo su billetera y la billetera de la persona con la que está negociando ... verdadera descentralización.

Un unicornio
Sí, al igual que un unicornio, ¡encontré un intercambio descentralizado funcional que realiza intercambios atómicos! Al igual que el unicornio, a menudo se hablaba de esta bestia mítica, pero nunca se la veía. Pero ahora se ha encontrado. Además, está en uso por proyectos muy notables como #Bitcoin, #Bitcoin Cash, Dash y #Litecoin. Sí, estas tres monedas son una de las 100 monedas que han completado el proceso de integración y ahora se pueden intercambiar mediante un intercambio atómico.

XBridge: una solución de intercambio atómico.
Me enteré de un producto llamado XBridge, creado por Blocknet.io y, de acuerdo con la documentación del sitio web, XBridge de Blocknet es capaz de realizar intercambios atómicos con más de 100 proyectos de criptomonedas diferentes. Estos proyectos de criptomonedas incluyen #Bitcoin, #Bitcoin Cash, #Dash y #Litecoin.

XBridge una verdadera cartera de pedidos y Exchange descentralizada.
XBridge realiza una billetera descentralizada para intercambiar o intercambiar billetera utilizando la tecnología de intercambio atómico. X-Bridge se acerca a cada uno de los cuatro componentes principales de un intercambio de criptomonedas de manera descentralizada (en palabras de los desarrolladores de Blocknet.co):

Escrito por @shortsegments

Posted Using LeoFinance Beta