One of the consistent features of many start-up companies using blockchain technology is the increasing desire to cut out any third party.
The goal behind these moves is that these new technologies, now more than ever, allows direct connection between consumers and the business.
The explosion of cryptocurrency is one of the biggest disruptors on the market in recent history. Cryptocurrency and the blockchain technology that records the transactions, has led to a “cutting out the middleman” in online transactions and is one of the reasons many users and businesses are seeking to use blockchain technology. Therefore, startup businesses are attempting to use cryptocurrency more and more. As a result, Business Insider reports that there are thousands of forms of cryptocurrency online.
While the anonymous and decentralized nature of cryptocurrency and blockchain technology has caused concern; many startup companies see ways to revolutionize industries. The cutting out the middleman allows creativity in ways that would have been unthinkable only a matter of years ago.
However, one significant middleman still exists in this equation: external exchangers.
That is to say, for cryptocurrency to be exchanged, there are still exchangers that users have to go through to receive the currency. It is a significant hassle and seems to run contrary to the removal of the middleman philosophy that is so central to this technological revolution.
One of the significant problems that have developed is cryptocurrency exchanges are beginning to take a long time to process. For example, Bitcoin’s exchanger Bitpay has recorded a massive increase in Bitcoin miners. This increase had, in turn, led to an enormous backlog of transactions that need to be approved. Bitpay records some transactions taking as little as a few hours, to a few days, and, in rare cases, a few weeks.
This processing time has caused frustration.
On-Chain Atomic Swaps
In September, the cryptocurrency Decred announced a new method of exchanging currency: On-Chain Atomic Swaps.
This new feature allows users to exchange cryptocurrency in a digital “over-the-counter” fashion that will enable users to avoid middlemen for the exchange. It is a straightforward process that empowers users. It must be asked, can On-Chain Atomic Swaps be the solution to the processing time problem for Bitcoin.
Bitcoin Atom is trying to offer a solution to this very problem.
This new network allows for a unique decentralized way to exchange digital assets using On-Chain Atomic Swaps. By using this decentralized process, advanced inter-blockchain mechanics, and years of researching blockchain technology, Bitcoin Atom looks poised to revolutionize this process.
Naturally, it must be asked if this is a stable network, by removing the middleman, does this make Bitcoin exchange riskier?
First, Bitcoin Atom makes itself secure by utilizing a hybrid consensus, that is, both Proof of Work and Proof of Stake models are used. This extra validation level increases network stability and reduces the power of miners, thereby lowering the 51% attack probability.
Second, Bitcoin Atom is working on a Lightning Network implementation that will allow for instant off-chain atomic swaps. This allows users of Bitcoin Atom to use a useful cheaper method for smaller transactions that have better privacy properties.
Lastly, by using built-in hash time-locked contracts (HTLCs) and its own HTLC application program interface (API), Bitcoin Atom is set to revolutionize how cryptocurrencies are exchanged. The goal is that it will give independence from intermediaries and any centralized entities.
With these systems in place, Bitcoin Atom should be able to finally solve the problem of the Bitcoin’s processing time by completely removing the need for a processing time, and its already getting support from big exchanges such as OkEx and Coinomi.
As the global economy continues to embrace cryptocurrency, it only makes sense that more efficient ways to exchange cryptocurrency will be of greater importance to the economy. Bitcoin Atom’s revolutionary method of On-Chain Atomic Swaps will make this system far more efficient for users and remove much of the hassle that has developed.
Bitcoin Atom’s cutting out the middleman continues to show the creativity developing in our world that would have been unthinkable only a matter of years ago.