it won't because CEX still offers many advantages and is also very popular with traders...
I don't use Atomic but 'swap' is not popular among traders. I'm sure traders agree that the features offered by CEX like Binance are very convenient for traders.
Topic: Will atomic swaps beat centralized exchanges? - page 2. (Read 336 times)
Centralized exchanges will not be "beaten" by anything, not defi, not atomic, not anything else because CEX are there to stay and they have their customers and they make their profits. Could other things grow bigger while CEX stays around the same growth? That could potentially happen but this will not happen because CEX will get worse, or because CEX will lose a lot of customers and volume, they will always be there growing at a steady rate becoming bigger and bigger, only potential here is that another thing could grow even faster to get at the first place without hurting anything with CEX.
If this means "beat" to you, you could consider it happening right now, biggest exchange in USA is coinbase and uniswap once took over in volume already in September.
If this means "beat" to you, you could consider it happening right now, biggest exchange in USA is coinbase and uniswap once took over in volume already in September.
I'm not familiar about how atomic swaps work,but I don't think that this is a direct collision between this new technology and centralized crypto exchanges.I think that the cryptocurrency exchange platforms will adopt the atomic swaps technology,if they see that the benefits of such implementation are more than the costs and potential risks.
I've heard the term "atomic swaps" 2 or 3 years ago and it seems that not much has been done with this concept and only a handful of blockchain experts are discussing topics about this crypto innovation.
I've heard the term "atomic swaps" 2 or 3 years ago and it seems that not much has been done with this concept and only a handful of blockchain experts are discussing topics about this crypto innovation.
For now at least it seems to be a slow adoption process for atomic-swap based exchanges. Some months ago I read that the first LN-based atomic swap exchange SparkSwap closed. This would be surely bad news for a young ecosystem. Atomic DEX (which is not LN-based) also seems not to attract too much attention here.
For the future however I think atomic swaps will gain their ground. They are ideal for those who want to exchange coins between blockchains now and then with low risks and without KYC, so my guess is they will compete with services like Changelly, not so much with exchanges focused on real-time trading - because real-time trading will imo always be better on centralized exchanges, even LN in my opinion will always be much slower.
And there are some cool "advanced" applications which are possible with atomic swaps but are still not really explored, like options (see this proposed protocol from @aliashraf).
It's true what stompix wrote that the fiat<->BTC market is surely still the predominant exchange market, but the USDT market shows that blockchain-based stablecoins allow a "value freeze" often sought by traders, and stablecoins can be (at least in theory) traded via atomic swaps. This would not solve the "cashing out"-problem. But in my opinion, one can already buy enough things directly with BTC in most places. So you have always an alternative to BTC-to-fiat exchanges.
(Note that atomic swaps are different from "one-blockchain-exchanges" like Uniswap or Bancor which only support tokens on one blockchain, mostly on ETH. These have their own set of advantages and disadvantages.)
For the future however I think atomic swaps will gain their ground. They are ideal for those who want to exchange coins between blockchains now and then with low risks and without KYC, so my guess is they will compete with services like Changelly, not so much with exchanges focused on real-time trading - because real-time trading will imo always be better on centralized exchanges, even LN in my opinion will always be much slower.
And there are some cool "advanced" applications which are possible with atomic swaps but are still not really explored, like options (see this proposed protocol from @aliashraf).
It's true what stompix wrote that the fiat<->BTC market is surely still the predominant exchange market, but the USDT market shows that blockchain-based stablecoins allow a "value freeze" often sought by traders, and stablecoins can be (at least in theory) traded via atomic swaps. This would not solve the "cashing out"-problem. But in my opinion, one can already buy enough things directly with BTC in most places. So you have always an alternative to BTC-to-fiat exchanges.
(Note that atomic swaps are different from "one-blockchain-exchanges" like Uniswap or Bancor which only support tokens on one blockchain, mostly on ETH. These have their own set of advantages and disadvantages.)
Do you think it's possible that atomic swaps will beat centralized exchanges?
Right now and I am willing to bet that for a long period to come what matters is BTC<> fiat. The rest is people playing, trading, trying to make a profit, and then, as clockwork, trying to cash that profit in their national currency. There is no way for this to be solved other than using a traditional exchange, be it a centralized one or something like bisq.
Until cryptos will be spendable like they are in RL without having to convert them to fiat all these are just dreams, short-lived ones
Again nobody needs DEXs?
Do you think it's possible that atomic swaps will beat centralized exchanges? Or are they too big to fail? Will centralized exchange's dominance be largely reduced because of atomic swaps? Or it won't have an impact whatsoever? Your input will be greatly appreciated. Thank you. 
I believe centralised exchanges won’t go down easily. The number one reason you have already given and that’s giant nature of the crypto exchanges. They have huge volume and investors who keeps the liquidity at highest volume.
On the other hand swap based exchangers are unpredictable. The other day one of the toke got listed for swap with 1.5k USD liquidity which is high enough considering the project was dead for couple of years.
Suddenly the whole liquidity was diluted to 400 bucks. Now we have to either wait for some liquidator to come along or the project owner themselves need to work it out.
So you see that’s the problem with swap and added advantage of centralised exchanges.
It is getting lot of traction lately indeed.
There are still issues regarding market making, liquidity but also transaction times:
When trading on a CEX, transactions/trades are processed virtually (without involving onchain transactions)
Settlement is made in the Exchange centralized database and funds only move for deposits and withdrawals.
Therefore, trading speed is quasi instant.
DEX and Atomic SWAPS usually pass by smart contracts and involve onchain transactions fees and blocktime delays every time.
ETH blocktime is at 10-20 sec (most common chain used by DEX and for swaps so far)
Buyers and sellers both first have to transfer their coins to the contract before receiving opposite side's funds.
Total transaction/trade time: blocktime x2 = up to 40sec
It is too slow for professional traders and institutions, especially when using automated trading algo or High frequency trading tools.
For individuals it is more acceptable, especially regarding side benefits: no KYC and security.
There are still issues regarding market making, liquidity but also transaction times:
When trading on a CEX, transactions/trades are processed virtually (without involving onchain transactions)
Settlement is made in the Exchange centralized database and funds only move for deposits and withdrawals.
Therefore, trading speed is quasi instant.
DEX and Atomic SWAPS usually pass by smart contracts and involve onchain transactions fees and blocktime delays every time.
ETH blocktime is at 10-20 sec (most common chain used by DEX and for swaps so far)
Buyers and sellers both first have to transfer their coins to the contract before receiving opposite side's funds.
Total transaction/trade time: blocktime x2 = up to 40sec
It is too slow for professional traders and institutions, especially when using automated trading algo or High frequency trading tools.
For individuals it is more acceptable, especially regarding side benefits: no KYC and security.
It's technically possible, but it's really going to depend if they could solve the UX problem. It's the same reason why non-custodial exchanges like Bisq isn't gaining that much traction compared to centralized custodial exchanges; it's because centralized custodial exchanges are still far easier to use and far more convenient despite the security and privacy risks.
Atomic swaps are slowly being adopted in the crypto/Blockchain industry. The integration of SegWit + Lightning Network has made this possible. Besides Bitcoin, altcoins have adopted the LN for their own benefit. This will make cross-chain transfers via atomic swaps seamless. If this new feature turns out to be widely successful, it might challenge centralized exchanges in the future.
Do you think it's possible that atomic swaps will beat centralized exchanges? Or are they too big to fail? Will centralized exchange's dominance be largely reduced because of atomic swaps? Or it won't have an impact whatsoever? Your input will be greatly appreciated. Thank you.
Do you think it's possible that atomic swaps will beat centralized exchanges? Or are they too big to fail? Will centralized exchange's dominance be largely reduced because of atomic swaps? Or it won't have an impact whatsoever? Your input will be greatly appreciated. Thank you.
Jump to: