Cryptocurrencies Exchange With Atomic Swap Training Ppt

Slide 1

This slide introduces the concept of atomic swaps. An atomic swap is known as an exchange of cryptocurrencies between two separate blockchains. The two parties conduct the transfer without the involvement of a third entity.

Instructor’s Notes: Smart contracts are used in the majority of atomic swap wallets and blockchains. A smart contract in the trade prevents one party from usurping or staking fraudulent claims on coins of the other.

Slide 2

This slide depicts the journey of an atomic swap and how it came into being. The idea gained currency immediately after altcoins became popular. With the introduction of altcoins, some cryptocurrency owners got interested in transferring funds. An atomic exchange between Decred and Litecoin was the first example of this type of token swap in September 2017.

Instructor’s Notes: Lightning Labs, a company that utilizes Bitcoin's lightning network for transactions, has used the technology to conduct off-chain swaps. Special cryptocurrency wallets have also been built to conduct cross-chain atomic swaps, such as Liquality's wallet, which can swap Bitcoin, Ethereum, and other cryptocurrencies.

Slide 3

This slide shows the working of an atomic swap by taking an example of two parties named Jack and Jill. Jack has bitcoins while Jill has litecoins that they want to exchange through an atomic swap. 

Instructor’s Notes:

• Jack creates a contract, and when he deposits bitcoins into that contract, a hash is generated
• This hash function does the work of a safe lock. Jack also creates a value in a data string that will be used as a key to open the safe and retrieve the funds. He then sends it to Jill so that he can complete his part of the contract transaction
• Jill does the same steps as Jack and deposits his litecoins in the contract address using the same hash. Both funds are tied to the same key in this fashion. 
• The key used by Jack to receive Jill's litecoins from his address is disclosed, allowing Jill to retrieve bitcoins from Jack's address

Slide 4

This slide discusses the importance of atomic swaps. Since atomic swaps eliminate the need for intermediaries like crypto exchanges, it is seen as a fundamental blockchain mechanism. Traders can now execute cross-chain trades without relying on centralized trading platforms' infrastructures.