What Everyone Should Know About Atomic Swapping.

[Wenbing]

In cryotocurrency holding sometimes it becomes very important to convert one form of digital currency into another. For example, Andrew has $10000 worth of litecoins but he want to use the coins but he has to convert the currency to another probably bitcoin before he can use it for what he is using it for.

That above example shows what the atomic swap means I.e. the conversion of one currency into another.

What I seek to learn about this from the forum are:
1. How does the atomic swap work technically?
2. What are the major problems of the atomic swap?
3.Is there limit to swapping and is there an applicable swapping fee?

Kindly share your thoughts as usual. Thanks

[joniboini]

What you describe is not an atomic swap, it's a simple conversion from one coin to the other that can be done in various ways, such as instant exchange, trading etc. There are a lot of websites where you can learn this, Google is your friend. For example:
1. https://en.bitcoin.it/wiki/Atomic_swap
2. https://blockgeeks.com/guides/atomic-swaps/
3. https://www.investopedia.com/terms/a/atomic-swaps.asp
4. https://bitcointalk.org/index.php?topic=5171728.0 (a list of atomic swaps services, not really updated it seems)
5. https://www.binance.vision/blockchain/atomic-swaps-explained

[Wenbing]

What you describe is not an atomic swap, it's a simple conversion from one coin to the other that can be done in various ways, such as instant exchange, trading etc. There are a lot of websites where you can learn this, Google is your friend. For example:
1. https://en.bitcoin.it/wiki/Atomic_swap
2. https://blockgeeks.com/guides/atomic-swaps/
3. https://www.investopedia.com/terms/a/atomic-swaps.asp
4. https://bitcointalk.org/index.php?topic=5171728.0 (a list of atomic swaps services, not really updated it seems)
5. https://www.binance.vision/blockchain/atomic-swaps-explained

Thanks for the constructive comment. I'll read through the materials for a better understanding about the concept.

[20kevin20]

After you get the hang of how atomic swaps work, I'd highly recommend you Atomic DEX by Komodo for mobile phones. Been using for a very long time and it does exactly what I request it to without having to worry about someone requesting my identity to proceed with the transaction and if a swap failed, I got my money back within a few dozens of minutes.

I personally haven't used other atomic swap tools - maybe there's one better and faster than Komodo's - but that's my personal suggestion.

Make sure you don't let yourself get lied to by online exchanges using the name of atomic swaps to their own advantage when, in fact, they have nothing to do with them. Always research before proceeding with sending some funds - it's your money. Take care of it.

[nc50lc]

What I seek to learn about this from the forum are:
1. How does the atomic swap work technically?
2. What are the major problems of the atomic swap?
3.Is there limit to swapping and is there an applicable swapping fee?

Here are the "technicals": BIP: XX - Atomic Cross Chain Transfers | Re: Alt chains and atomic transfers

Most of those advertised "Decentralized Exchange" use something like that under that hood.
It's basically a bunch of scripts made from your own public keys that have certain conditions before each party can proceed & spend the final transaction's outputs.

That's also one of the disadvantages versus regular instant exchange because it's only compatible with coins that supports such scripts, the coin selections will be limited.
Another one (an advantage rather) is newbies normally mess-up handling their funds when it's in a non-custodial client like a decentralized exchange,
not really a disadvantage but it's a usual beginner's issue (Bec.: Beginners & Help).

[Annisa_crypto]

In the atomic wallet, one can swap coins directly in the wallet and there is no third-party (in short there is no custodial exchange involved in it). Atomic swap saves the time which exchanges are taking while swapping the coins the biggest drawback of an atomic swap is without any trustable exchange you have to swap with the person. This swap occurs on the peer to peer network. As there is no exchange involve in it so you have to pay the blockchain fee which is required.

[Wenbing]

In the atomic wallet, one can swap coins directly in the wallet and there is no third-party (in short there is no custodial exchange involved in it). Atomic swap saves the time which exchanges are taking while swapping the coins the biggest drawback of an atomic swap is without any trustable exchange you have to swap with the person. This swap occurs on the peer to peer network. As there is no exchange involve in it so you have to pay the blockchain fee which is required.

Exchange and swapping are somehow interwoven in cryto. One Ares of similarity is that they bought have a fee.

Is that what you mean?

[bitmover]

That's also one of the disadvantages versus regular instant exchange because it's only compatible with coins that supports such scripts, the coin selections will be limited.

I believe this can be called more of an advantage. If atomic swaps become a thing, people will move their tokens to those blockchains which support those scripts.

I see too many "new ethereums' out there, such as Tron, Neo, Waves, etc (and probably much more out there that I don't even know).

But atomic swaps are not a thing yet. I don't know a single place where I can do it safely... Most of the services out there which call themselves atomic swaps are just excahnges.

[nc50lc]

-snip- the biggest drawback of an atomic swap is without any trustable exchange you have to swap with the person. This swap occurs on the peer to peer network. --snip-

I wouldn't call that drawback because "Trust" was already covered by Atomic swap, it's not a simple send and receive transactions.
You don't have to trust the other party because the trade wont proceed if there's hiccup or even if it's at the final stage, you can refund your coins.

Those addresses where you should send your funds are designed to have a timelock, refund/spend conditions and a "secret" (it's also created using your own keys);
those are configured to be recoverable in case of a failed trade & the "to-be-traded" coins can only be spent by both parties unless the secret was revealed to finalize the trade.

The fee wont always be an issue either, a 1input-2outputs tx @50+sat/byte is still a lot cheaper than any Exchange's withdrawal fee or Instant Exchanges' trading fee.
One potential drawback for the fee is: if the either one of the final transaction got stuck unconfirmed due to a really low fee, the occasional "mempool clogging",
and the timelock for the refund transaction was due, then the other party can broadcast that refund tx (if it's RBF) or send it to a 'friend' solo-miner/pool to double-spend the inputs of the unconfirmed claim transaction.