Topic: Will atomic swaps replace crypto currency exchanges? (Read 550 times)

it will in a great extent. the way and manner in which exchanges give principles and traders make the exchanging business go is enough to make people find comfort in the more confidence in the atomic swap of exchanging tokens and that will in no time take over the space

This is a new tool that can be used and is very important for diversifying the market and addressing the investors in a wider spectrum. The SWAP issue can only be seen as an alternative at this stage, but we cannot have a conviction about how far the future will be.

I think the Exchange has proven themselves with what they have done for a while. (Yes, despite all the bad events) Because people are still trading millions of pounds on exchanges every day.

I follow the projects that make Atomic Swap. There are projects that I think are very successful. But I think there is no serious progress yet.

This will spell the end of binance's dominance and also the value of the BNB token. When atomic swap becomes the norm, people will away from exchanges and their ridiculous fees. This could be more of a danger for CEX's than DEX's

I think that the merit rightfully shows the relevance of your post.

That would be extremely useful for people who don't really want to use exchanges(me) and want to swap between Cryptocurrencies easily. Especially those who don't really want to do an ID verification, i wonder if they would somehow request it. If not, that aspect only will bring a lot of people.

Pretty interesting thing, we should keep an eye on it.

The main problem of atomic swap via standard blockchain transactions (as in TierNolan's model) is that they're slow, so many trading techniques cannot be used. So commercial trading activity will stay low on atomic swap platforms. The hope is to use Lightning for a smoother trading experience and lower fees, but as Carlton Banks wrote below, it's possible that this approach has some flaws that make it inviable. Will need to investigate more about that, however.

Also it's worth to note that atomic swap exchanges cannot integrate fiat currency, as there is no secure way to ensure a fiat transfer has happened. The only possibility is to use "crypto fiat", like Tether or Dai, but the problem then consists in transforming fiat into crypto-fiat without a centralized middleman, which may need KYC.

But for most crypt-to-crypto transactions that do not need to be carried out instantly (i.e. as a replacement for LocalBitcoins and similar platforms), in my opinion, atomic swaps are very interesting and could achieve a big market share in that field. I have proposed in another thread to combine the atomic swap approach with others like Bisq and stablecoins to make it more attractive.

Both "problems" seem to be related to the centralized nature of some "atomic swap" exchange platforms. If atomic swaps are performed in a totally decentralized way via a software (like on BarterDEX), you only pay the standard network fees. Also, KYC is not necessary as no central party is needed that would need to fulfill regulations.

Interesting ... I think the mailing list thread you mean is this one ("An Argument For Single-Asset Lightning Network"). Will read it.

I think it could really replace the crypto currency exchange the only problem is how are we going to see the current price with the atomic swap?
If I am not mistaken then the shapeshift.io is considered as an atomic swap right ? I mean we could switch tokens/coins easily in their platform without any account and any traces back in the old days.
I really like it back then we don't need some account and just use it easily send your crypto and choose which one you want to receive .

The book. Where is the book. Exchanges will still offer many features that would be really difficult to use in decentralized options like Atomic Swaps, 0x etc.

But the real utility of an exchange is the possibility of trade Fiat. We would still need ways to exchange Fiat to crypto. Even if crypto to crypto could be traded using some decentralized option. So no. Atomic Swaps will not replace Exchanges.

Atomic swaps at present were limited, and there isn't any big chance for the replacement of cryptocurrency exchanges with atomic swaps. If atomic swaps go high in the market automatically the trading circulation gets affected which is the important thing that predicts the market of each cryptocurrency.

Supposedly, atomic swaps won't work over Lightning

Someone on the Lightning mailing list (https://lists.linuxfoundation.org/pipermail/lightning-dev)) made a convincing case that either or both parties can perpetually wait out the exchange rate changes until they get a rate they prefer, refusing to sign their half of the lightning transaction until the rate looks good to them. This behaviour could become so widespread that liquidity in the market would never develop if too high a proportion of traders cancel their trades in this way.

tl;dr: the mechanism works, but traders won't use it if they can't close a swap deal at a price they actually want

Would be good if this happened but there is still a problem.
- Atomic swaps seems to charge much higher fees compared to ordinary crypto exchanges
- Some of this atomic swap projects thou still in baby stages are already enforcing KYC for users like Kyber Network which to me make no point of even getting excited about them.

In theory, atomic swaps should replace the cryptocurrency exchanges, but in reality, I don't think that will happened.
People who use atomic swap will end up paying a lot of fees, and then waiting a lot of time for the transactions to go through. And the exchanges will always have lower fees than the atomic swap and on an exchange, you will have costumers service and you will be able to make margin trade every second.

Andreas got a Q&A about atomic swaps https://www.youtube.com/watch?v=fNFBA2UmUmg

It can be but it needs time. It would cut out the middle men for the current instant swap services.
The same gos for decentralized exchanges.

Atomic Swaps is actually a pretty interesting topic to discuss because of what it can bring to the table but I agree, it would be hard for it to replace cryptocurrencies exchanges for the reason the we all know who's faster. Though losing your funds is a problem.

No,  I don't think it will replace cryptocurrencies exchanges. Atomic swaps is not that fast. Also,  for a trader, cryptocurrencies exchanges it still the the best for them so they can take advantage of any movements in the market.

maybe, maybe not, no one can tell for sure if Atomic Swaps will replace exchanges.

Even if it could it would take a long while, as exchanges are working quite well and there is little need for change

yes, I think that atomic exchange cannot replace crypto. the problem with crypto is enough for many people to be interested and it is enough to provide something useful for the country that approves it. so it's difficult to change everything.

Hey all, interesting views on Atomic Swaps. I personally think Atomic Swaps are the future, and really the only way people should be exchanging cryptocurrencies, because the risk of losing your funds is too high. Right now there are few projects working on Atomic swaps, which means liquidity will be low. But this won't be the case forever.

Also on the note of smaller coins may need exchanges, I'd disagree. Last I heard, Binance charges 1 million dollars to be listed on their exchange. In the current market, that's definitely a large barrier to entry for new coins and projects trying to be listed. With Atomic Swaps, that cost is 0.

Also the fact that KYC is not required is a huge bonus. It may work to help onboard more crypto users, more quickly, rather than having to wait a month to get approved by an exchange.

There's actually a project actively working on atomic swaps called Liquality (https://liquality.io) you can actually swap testnet coins right now https://liquality.io/swap/ (Testnet Bitcoin and Rinkeby Ether).

Let me know if anyone wants to trade 

Hello and thanks for this discussion. I think atomic swaps are not very common sense yet but maybe in the future it will be.

I just wanted to tell you, that there is a relatively small project called Electracoin and they are looking forward to implement atomic swaps within this quarter (hoping they can fulfill their goals on the roadmap, but i don't have a clue about programming and how difficult an implementation of something like this is).

However, people who read this thread might be interested and take a look at https://electraproject.org for some more information.

Hope to trade with you guys in the near future (without risking my funds on an exchange)