And if there were no exchanges to hack?

While a new generation of crypto users is starting to invest in technology, developers are increasingly concerned about its infrastructure. They have seen this happen before – new users enter the space attracted by big gains, and then suddenly, a catastrophic failure, usually to the same exchanges designed to hold and hold these funds.

But from the adversary, the inspiration takes off, with high-level coders turning their attention to atomic exchanges, a concept that claims to allow the direct transfer of crypto-currencies from different channels. blocks. Instead of the vulnerable trade we use today, the idea behind atomic trading is that these large client currency deposits could be rendered obsolete by the code.

And seasoned blockchain developers like Alex Bosworth believe that this is too necessary, especially since users today have to give up the custody of their assets if they choose to hold funds on the stock exchanges.

He told CoinDesk:

"The fact that users have control of their own private keys is the best way to ensure security despite individual cases of loss. Funds under centralized control over trade led to failures the most massive security. "

Andrew Gazdecki, CEO and co-founder of Altcoin.io, who recently launched a beta wallet for atomic exchange between crypto tokens, describes the problem in similar terms, arguing that the users should be allowed to hold their own private keys. alphanumeric strings that allow users to unlock, access and spend their funds) without relying on others.

"There are literally billions of dollars held in these digital honey pots, and it's almost impossible to find the culprits," he said.

The first examples of atomic exchange technologies emerged at different stages in 2017, and although there is disagreement about the timing, they will be available to the public, some believe that 2018 will be their year.

As Jameson Lopp, a BitGo software engineer, recently tweeted:

"Almost instantaneous atomic exchanges … arrive earlier than everyone else thinks, certainly not in a year, but in a few months."

Atomic exchanges already?

In some ways, atomic swaps are already there – depending on the type of atomic exchange you are looking to make.

For example, last year, swaps between different blockchains built on a similar code – decrypted crypto-currencies, litecoin and bitcoin – were executed. Meanwhile, atomic exchanges between cryptocurrency tokens on the same blockchain have become more common, with decentralized exchanges such as 0x and, as mentioned above, Altcoin.io, adding instant exchanges between tokens on compatible protocols. Ethereum.

Cryptocurrencies running on blockchains with very different code bases, however, need to rely on tools specifically designed to facilitate this type of transfer today.

Towards this goal, a zcash exchange tool for bitcoin called ZBXCAT was developed last year. Described by co-developer Jay Graber as the "walkie-talkie payments", the tool will soon be accompanied by a simplified web interface.

Indeed, atomic trading "could still be done manually," Graber said. However, since this requires a certain level of technical competence, before atomic exchanges are no longer used, platforms that are easier to use will have to be developed.

At the same time, Lightning Labs, a company dedicated to promoting Bitcoin's Lightning Network, recently completed its first off-channel atomic exchange on its test blockchain. Completed in November, the transaction saw litecoin and bitcoin traded on an off-line payment channel.

Obstacles outside the chain

Off-line atomic swaps of this type are highly anticipated because the exchanges would be automatic, would not depend on the processing times of different blockchains, but on the technology needed to implement off-line atomic swaps – Lightning Network and Raiden Network on ethereum – are still under development.

That's why some, like Elizabeth Stark, CEO of Lightning Labs, are less optimistic about the atomic exchanges of cross-block strings.

Stark recently dismissed the hype, writing on a development channel: "Anyone telling people that Lightning's exchanges will be ready in a few months does not know what they're talking about."

And in an interview with CoinDesk, Stark said:

"There is still a lot of infrastructure to build."

A website, swapready.net, provides a breakdown of how each cryptocurrency is close to supporting inter-channel atomic exchange capabilities – and to date, there are very few few that can interoperate.

Philippe Castonguay, developer relations manager at 0x, which offers atomic exchanges of tokens on ethereum, told CoinDesk that developers looking to create atomic swaps between very different protocols are facing "many challenges."

The infrastructure needed for the interface between bitcoin and ethereum, for example, is still in development, and "to make the situation worse, these cross-cutting platforms also need to address some of the key issues that d & # 39; other blockchains are trying to solve, like scalability, "said Castonguay.

Still optimistic

Yet even with a lot of work to do, many remain confident that progress is near.

Bosworth, whose work has focused primarily on developing applications for Bitcoin's Lightning Network, has made his excitement a new public era by tweeting: "The Atomic Era Approach , which can not be exchanged will be abandoned. "

And Castonguay, whose work focuses on etheric, also remains encouraged by the development that is happening in this ecosystem. Even if the swaps between blockchains with different code bases prove tedious, he thinks that the blockchain could give other solutions given the expansive capabilities of its code.

"Eventually, the ether blockchain will be able to communicate with other blockchains," he said. "Once that happens, all the different pieces of different blockchains will be representable on the blockchain ethereum."

For example, if the bitcoin and ethereum blockchains can communicate with each other without trust, then users could have an ERC-20 bitcoin on the ethereum blockchain, coupled one by one with bitcoin on the bitcoin blockchain he postulates.

Such short-term solutions, he thinks, could help advance the redesign of the atom swap concept.

Castonguay concluded:

"I think it's possible that some blockchains could interact with each other this year, but I think 2019 to 2021 would be a safer bet."

Disclaimer: CoinDesk is a subsidiary of Digital Currency Group, which owns a stake in BitGo.

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