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Atomic swaps have become quite popular in the world of cryptocurrency. That is to be expected, as this concept removes the need for centralized exchanges altogether. One of the biggest challenges to overcome is finding ways to trade value across different blockchains which may not be natively compatible with one another. The first atomic swap between Bitcoin Cash and Komodo has now been completed on the BarterDEX platform.
A Successful Bitcoin Cash Atomic Swap
In the world of atomic swaps, one would expect most of these trades to occur with Bitcoin. After all, the main reason centralized exchanges are so popular is that they allow users to exchange Bitcoin for various altcoins and vice versa. If this method were to become obsolete and value could be exchanged directly, the cryptocurrency ecosystem would be much better off. There is still a lot of work to be done before we see such atomic swaps at the protocol level, though.
Moreover, it seems solutions such as BarterDEX aren’t too keen on using Bitcoin for atomic swaps in general. The company is dropping all Bitcoin support in this regard, as the high fees and slow confirmation times make the entire concept of atomic swaps nearly impossible. Bitcoin Cash is of greater interest to the team, and the first atomic swap involving BCH and Komodo has been completed successfully. This is a big milestone for the team and the involved cryptocurrencies, as it shows exchanging value directly is certainly possible.
In this atomic swap, the buyer used KMD to buy Bitcoin Cash using BarterDEX, and the trade was completed in short order. A lot of new opportunities are waiting to be explored, and it seems both BarterDEX and Komodo will play a big role in the future of atomic swaps. Not too long ago, we also saw Litecoin get involved with on-chain atomic swaps, although those trades did not involve BarterDEX.
For users, atomic swaps introduce a lot of positive changes. First of all, there are no verification processes required to convert various cryptocurrencies, as there is no centralized exchange overseeing things. Although this will undoubtedly attract the attention of cybercriminals as well, it also allows all enthusiasts to use cryptocurrency as it was meant to be. This entire ecosystem focuses on decentralization; thus, it makes no sense to rely on centralized trading platforms whatsoever.
It will be interesting to see how this successful trade affects the Bitcoin Cash ecosystem. Although still an altcoin compared to Bitcoin, it is evident this particular ecosystem has seen a lot of growth and many positive developments. Assuming BCH can become an integral part of cryptocurrency atomic swaps, its future certainly looks a lot more interesting than it did before. Especially now that BarterDex may be dropping Bitcoin support altogether, it’s worth keeping an eye on these developments.
Anyone can see the cryptocurrency industry is maturing and finding its own ways to move and exchange value all over the world. With exchanges enforcing strict KYC and AML rules, it is only normal that people will look for alternatives. Decentralized exchange solutions and atomic swaps are clearly the way to go in this regard. It may still take a few years until this technology is widely used, but for now, its progress is pretty promising.
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.