Topic: [2017-09-24] SegWit: First Steps To Ecosystem (Read 5208 times)
With coins that share the same protocol/rules/code services like ShapeShift or Changelly will be things of the past. Atomic cross chain transactions will be like exchanging cash p2p with a stranger knowing that those banknotes are not counterfeited. We would only need a nice GUI on most common wallets and voilà, Atomic cross chain txs made easy. Exciting times, indeed.
I suspect that doing it via Lightning just makes atomic cross-chain transfers easier and more efficient to do. But as long as you can lock funds, it's possible to do it in a slightly clunky and rough way like they did.
LN isn't needed, but Segwit does remove a form of DoS attack, transaction malleation could be used to wreak havoc with the atomic transfer transaction (I believe the transaction hash, the target of malleation, for the time-locked funds is used as an input to the swap transaction. Segwit disallows that form of malleation).
Lightning just makes it faster and cheaper, as far as I'm aware, and that would open the doors to.... p2p exchanges that can trade at the sort of speed needed for a real time price. That could be a genuine game changer, and illustrates the pointlessness of the "you can't replace Coinbase" nonsense. Governments and regulators could ban Bitcoin altogether, worldwide, and still BTC exchanges would thrive without centralised pressure points. I kind of hope they do, Bitcoin was always about the free market anyway. Detractors might say "gonna be slightly slow getting your Tether USD onto your OKPay account..." but I seem to remember fiat withdrawals from the centralised crypto exchanges being pretty slow also. Plus ca change.
Lightning just makes it faster and cheaper, as far as I'm aware, and that would open the doors to.... p2p exchanges that can trade at the sort of speed needed for a real time price. That could be a genuine game changer, and illustrates the pointlessness of the "you can't replace Coinbase" nonsense. Governments and regulators could ban Bitcoin altogether, worldwide, and still BTC exchanges would thrive without centralised pressure points. I kind of hope they do, Bitcoin was always about the free market anyway. Detractors might say "gonna be slightly slow getting your Tether USD onto your OKPay account..." but I seem to remember fiat withdrawals from the centralised crypto exchanges being pretty slow also. Plus ca change.
Thanks for that guys, as usual a lot more helpful than the article itself. my initial SW and LN interest was because of the possibility for rapid and scheduled p2p exchanges, especially between parties that do it a lot.
I thought of it in the context of a personal example, say, as a freelancer with multiple fixed clients, some of whom pay a quasi-fixed rate on time count and on product count. Both sides still manually keep track for bookkeeping purposes, including scheduling and rates. But because of accounting, we have to fix the rate retrospectively (after txs are confirmed) and that is a huge pain during network bloat. Blockchain.info now stamps the value at time of confirmation so that's very helpful but an indefinitely open p2p channel would be "my dream".
Why this news was interesting was I didn't know this could be done cross chain. This addresses another part of my problem as different clients use different alts (hence current need for clumsy DEX)! Exciting times!
Gotta admit this is out of my depth currently. Basically, what Litecoin has demonstrated is that atomic swaps is currently already possible with real coins hopping across actual blockchains, right? For now, am not sure if people would flock to atomic swaps especially with the added necessity of 2-2 multisig.
As it is, it's a struggle to convince people to come to a DEX. Have made a couple of test trades myself but volume is still too thin where I am (Counterparty).
Also, Lee says SegWit and LN are a must. But if atomic swaps are on chain, why is LN needed?
As it is, it's a struggle to convince people to come to a DEX. Have made a couple of test trades myself but volume is still too thin where I am (Counterparty).
Also, Lee says SegWit and LN are a must. But if atomic swaps are on chain, why is LN needed?
LN isn't needed, but Segwit does remove a form of DoS attack, transaction malleation could be used to wreak havoc with the atomic transfer transaction (I believe the transaction hash, the target of malleation, for the time-locked funds is used as an input to the swap transaction. Segwit disallows that form of malleation).
Lightning just makes it faster and cheaper, as far as I'm aware, and that would open the doors to.... p2p exchanges that can trade at the sort of speed needed for a real time price. That could be a genuine game changer, and illustrates the pointlessness of the "you can't replace Coinbase" nonsense. Governments and regulators could ban Bitcoin altogether, worldwide, and still BTC exchanges would thrive without centralised pressure points. I kind of hope they do, Bitcoin was always about the free market anyway. Detractors might say "gonna be slightly slow getting your Tether USD onto your OKPay account..." but I seem to remember fiat withdrawals from the centralised crypto exchanges being pretty slow also. Plus ca change.
Gotta admit this is out of my depth currently. Basically, what Litecoin has demonstrated is that atomic swaps is currently already possible with real coins hopping across actual blockchains, right? For now, am not sure if people would flock to atomic swaps especially with the added necessity of 2-2 multisig.
As it is, it's a struggle to convince people to come to a DEX. Have made a couple of test trades myself but volume is still too thin where I am (Counterparty).
Also, Lee says SegWit and LN are a must. But if atomic swaps are on chain, why is LN needed?
As it is, it's a struggle to convince people to come to a DEX. Have made a couple of test trades myself but volume is still too thin where I am (Counterparty).
Also, Lee says SegWit and LN are a must. But if atomic swaps are on chain, why is LN needed?
As per the quoted article Segregated Witness and the Lightning Network were used only for marketing purposes. It’s clearly stated that: Segwit has not been used and you don’t need no LN to do such atomic swaps. I don’t get why fooling readers by mentioning SegWit in the headline though…
But, I mean, whatever the reason this cross-chain functionality is a great step forward.
I'm not a code-monkey, so I could be wrong, but I think it's that stuff like HTLC, CLTV and the OP_CHECKLOCKTIMEVERIFY opcode are required to make it work. That's what allows you to "lock" funds so that a transaction output can be made unspendable until a specified point in the future. Generally, coins that aren't heading in the direction of utilising SegWit and Lightning won't have those features implemented. They pretty much come as a bundle, in a sense, since being able to lock funds for a set time is what makes it all possible.
Much like SegWit wasn't technically a requirement to implement Lightning, but it just makes it more simple to do, I suspect that doing it via Lightning just makes atomic cross-chain transfers easier and more efficient to do. But as long as you can lock funds, it's possible to do it in a slightly clunky and rough way like they did.
That would be my guess, anyway.
Gotta admit this is out of my depth currently. Basically, what Litecoin has demonstrated is that atomic swaps is currently already possible with real coins hopping across actual blockchains, right? For now, am not sure if people would flock to atomic swaps especially with the added necessity of 2-2 multisig.
As it is, it's a struggle to convince people to come to a DEX. Have made a couple of test trades myself but volume is still too thin where I am (Counterparty).
Also, Lee says SegWit and LN are a must. But if atomic swaps are on chain, why is LN needed?
As it is, it's a struggle to convince people to come to a DEX. Have made a couple of test trades myself but volume is still too thin where I am (Counterparty).
Also, Lee says SegWit and LN are a must. But if atomic swaps are on chain, why is LN needed?
As per the quoted article Segregated Witness and the Lightning Network were used only for marketing purposes. It’s clearly stated that: Segwit has not been used and you don’t need no LN to do such atomic swaps. I don’t get why fooling readers by mentioning SegWit in the headline though…
But, I mean, whatever the reason this cross-chain functionality is a great step forward.
Gotta admit this is out of my depth currently. Basically, what Litecoin has demonstrated is that atomic swaps is currently already possible with real coins hopping across actual blockchains, right? For now, am not sure if people would flock to atomic swaps especially with the added necessity of 2-2 multisig.
As it is, it's a struggle to convince people to come to a DEX. Have made a couple of test trades myself but volume is still too thin where I am (Counterparty).
Also, Lee says SegWit and LN are a must. But if atomic swaps are on chain, why is LN needed?
As it is, it's a struggle to convince people to come to a DEX. Have made a couple of test trades myself but volume is still too thin where I am (Counterparty).
Also, Lee says SegWit and LN are a must. But if atomic swaps are on chain, why is LN needed?
Glad to see there is some progress being made on this front. I've been following a few altcoins that support Atomic Cross-Chain Transactions over the years and was hoping that Bitcoin would support it at some point. Decentralised exchange will be one of the greatest advancements in Bitcoin to date, since there will be far less reliance on centralised exchanges for trading alts. The only remaining permissioned bottleneck will be the "on ramps" of fiat into crypto, where there will almost certainly still be reliance on centralised third parties.
But once you're in, you will be able to hop freely (in terms of permission, but not necessarily cost) from one chain to another. Theoretically, this is probably the greatest scalability mechanism for Bitcoin (or crypto in general) too. If Bitcoin's main network is too congested for a small transaction to be cost-effective in terms of fees, you'll probably have funds on other relatively secure chains to spend instead. Those other coins will be readily accepted if people know that converting them back into Bitcoin will be a simple and straightforward process. Eventually, Bitcoin will serve as the financial backbone for the cryptoverse and all the other currencies out there can be used for lesser sums and "cups of coffee on a blockchain". That said, the main chain still has to be readily available in terms of throughput for all this to happen. The option to use "layer 0" should always be there, even if it is a more expensive option.
Lighting by itself, or other forms of off-chain transactions, have never had the same appeal to me as on-chain transactions. Opening a payment channel between two participants to make repeated payments back and forth certainly sounds like a legitimate and efficient use case, but that wouldn't be a frequent occurrence for everyone. However, moving funds from person to person routing via multiple different participants off-chain, as some people propose is the way forward for Bitcoin, is undeniably a different trust model than the one we've grown accustomed to, not to mention fairly complicated for new users to grasp. But if another use of Lightning is merely the vehicle by which to safely reach other blockchains, then I'd be far more inclined to use it. For me, that's the way forward which keeps everyone free to transact however they choose.
Atomic cross-chain > Off-chain
But once you're in, you will be able to hop freely (in terms of permission, but not necessarily cost) from one chain to another. Theoretically, this is probably the greatest scalability mechanism for Bitcoin (or crypto in general) too. If Bitcoin's main network is too congested for a small transaction to be cost-effective in terms of fees, you'll probably have funds on other relatively secure chains to spend instead. Those other coins will be readily accepted if people know that converting them back into Bitcoin will be a simple and straightforward process. Eventually, Bitcoin will serve as the financial backbone for the cryptoverse and all the other currencies out there can be used for lesser sums and "cups of coffee on a blockchain". That said, the main chain still has to be readily available in terms of throughput for all this to happen. The option to use "layer 0" should always be there, even if it is a more expensive option.
Lighting by itself, or other forms of off-chain transactions, have never had the same appeal to me as on-chain transactions. Opening a payment channel between two participants to make repeated payments back and forth certainly sounds like a legitimate and efficient use case, but that wouldn't be a frequent occurrence for everyone. However, moving funds from person to person routing via multiple different participants off-chain, as some people propose is the way forward for Bitcoin, is undeniably a different trust model than the one we've grown accustomed to, not to mention fairly complicated for new users to grasp. But if another use of Lightning is merely the vehicle by which to safely reach other blockchains, then I'd be far more inclined to use it. For me, that's the way forward which keeps everyone free to transact however they choose.
Atomic cross-chain > Off-chain
Amazing! That's totally awesome to know it is possible to buy and sell and trade altcoins with bitcoins these easy! Well its a bit complicated but I think it could catch on.
Though, I have a question about segwit. Where does segwit come to play here? I am not too technically inclined, so I want to know and hope someone can explain it in a simplified manner.
Though, I have a question about segwit. Where does segwit come to play here? I am not too technically inclined, so I want to know and hope someone can explain it in a simplified manner.
SegWit: First Steps To Ecosystem
-This past week was a big step forward for the SegWit Ecosystem, i.e., SegWit enabled coins. Within a span of four days, Litecoin has been successfully exchanged through Atomic Swaps with Decred, Vertcoin, and then finally Bitcoin.
On Sep. 19, 2017, Charlie Lee, the creator of Litecoin, and Alexlyp, from the Decred Project, were able to swap 1.337 LTC for 2.4066 DCR. Although they ran into difficulty at first, they were able to complete the swap via on-chain transactions through Decred’s repo wallet. The Lightning Network was not utilized as it still needs to be developed further before Atomic Swaps can be implemented.
https://twitter.com/SatoshiLite/status/910534107058233344
-A day after on Sep. 20, 2017, Charlie teamed up with James Love Joy, the lead developer of Vertcoin, to perform another Atomic Swap. James was able to port Decred’s code to VTC and this time the two successfully exchanged 1 LTC for 55 VTC flawlessly. This too was an on-chain transaction and did not utilize the Lightning Network.
https://twitter.com/SatoshiLite/status/910679160695091201
-Finally, on Sep. 22, 2017, Charlie worked with a John S to perform Atomic Swaps between LTC and BTC. The two followed the same processes outlined above and successfully swapped 10 LTC for 0.1137 BTC.
https://twitter.com/SatoshiLite/status/911328252928643072
What exactly is Atomic Swaps?
Very briefly, Atomic Swaps is a technology that allows a peer-to-peer exchange of two different coins. This is often called a “cross-chain” transaction and is made possible through the use of Hash-Time Lock Contracts(HTLC) on a multisig wallet.
To accomplish this, you’ll need two 2-2 multisig addresses: one for LTC and one for, let’s say, VTC. First, both parties send their respective coins to the corresponding multisig addresses and immediately lock it up with HTLC for “x” amount of time. In this scenario, let’s say it’s one hour. The HTLC also stipulates that the coins will go back to their owners if one hour passes. This will act as insurance for the owners.
Now one party opens a payment channel of 1 LTC while the other an offer of 55 VTC. If both parties are satisfied, they sign the respective channels to close them. You have now completed your Atomic Swap.
The significance of this technology seems very exciting as it furthers one of the core principles of Blockchain technology: decentralization. Once implemented, Atomic Swaps may allow peers to trade two different coins without a third-party like an exchange.
To be clear, the exchanges Charlie did with DCR, VTC, and BTC did not utilize SegWit. However, this technology will be necessary as a fully functioning and scalable Atomic Swap system will require the Lightning Network.
Ultimately, there are two significant take aways from the swaps between LTC-DCR, LTC-VTC, and LTC-BTC:
.They were done with real cryptocurrencies and not testnet coins
. It represents a significant first step as a proof of concept for future Atomic Swaps within the SegWit Ecosystem.
https://cointelegraph.com/news/segwit-first-steps-to-ecosystem
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