Litecoin (LTC): The idea of atomic swaps, also known as atomic cross chain trading, was introduced on the Lightning network back in November 2017 to allow Bitcoin-Litecoin exchange transactions on the network. The product has since been placed in a development process with the exchange between BTC/LTC happening in an instant. In this article we discuss the role played by Exchange Union and the implications the atomic swap will have on then overall exchange of cryptocurrencies instantly in a trustless environment.
Exchange Union is an open source project that offers its users with the best market price, high liquidity and user friendliness while exchanging cryptocurrencies. The protocol is also developing the XU node software. XU nodes are operated by independent digital asset exchanges, which form the decentralized Exchange Union Network. The technology enables instant, secure and trustless trades of different digital assets between exchanges.
The announcement of product development on the atomic cross chains between BTC and LTC was made on Exchange Union official Medium page. By restructuring the Lightning Network Daemon (LND) and through a bit of hacking they were able to finally able to swap BTC and LTC instantly in a trustless environment.
How do atomic swaps work?
Atomic swaps or atomic cross-chain trading involves the exchange of cryptocurrencies between users and interested parties without reliance of a third party. Current systems dictate that you have to trust in third parties such as exchanges to complete the exchange. Atomic swaps will provide a platform that allows trustless transfer of cryptocurrencies and other assets between parties.
Imagine two parties, X and Y both need to exchange cryptocurrencies. X has Bitcoins worth $80,000 and wants to exchange the BTC for Litecoin. Y on the other hand, has $80,000 worth of LTC and needs to exchange them for BTC. Both of them will need to rely on a third party to transfer the coins without the doubt that X may receive the LTC and not send his BTC or Y receives the BTC and doesn’t send LTC. This problem is solved by atomic swaps through utilizing hash time-locked contracts (HTLCs).
“A hashed time-Lock contract or agreement, (HTLC) is a payment system that uses hash locks and time locks to require that the receiver of a payment either acknowledge receiving the payment prior to a deadline by generating cryptographic proof of payment or forfeit the ability to claim the payment, returning it to the payer.”
Litecoin (LTC) is currently trading at $120.74, a slight 1% increase in the last 24 hours. The last 30 days has seen the price drop from a high of $156 as the whole cryptocurrency market faced a stint of red after a fall of Bitcoin below the $8000 mark. LTC is ranked sixth on the Coinmarketcap rankings with a total market capitalization of $6,869,984,262 USD. The last 24 hours has seen a total of $259,565,000 USD worth of LTC traded with OKEx having 29% of the total trades.