Bitcoin Q&A: Atomic swaps


I thank you so much for uh kinda Chicago to speak but shouldn’t all the points now million with someone like overstock who’s a major corporation they’re just starting off their own coin isn’t going to be a little much to to manage it for the average user I think they need a coin to buy things from overstock to buy things over to buy things from you know let’s say yes an average user buy something from the 50 different brands so I think it’s important to realize that as part of the transition towards fully programmable digital money one of the things you are changing is this idea of having very high switching costs so switching costs an economic sense and in as a term used in economic switching cost is the cost to switch to a different competing system right I’m with Comcast I want to be with oh wait they bought all of them I’m with I can’t find a single example of competition so the theory in economics is that when you have to substitute goods and you try to switch between them one of the considerations is the switching cost right now so what is the switching cost with traditional currencies is actually quite high if you want to switch from you know USD to euro from euro to yen there’s some significant switching costs in fact and for many people around the world the switching costs are equivalent to infinity because it is illegal or highly controlled as to who can use multiple currencies so what happens in a world of digital programmable money is that the switching costs drop to zero and if you have liquid systems that can be swapped so one of the technologies that I’m really excited about now is the application of payment channels and simple smart contracts to do what are called atomic cross chain swamps who’s heard of that term before okay so an atomic cross chain swap is when you take two chains and you nuke one of them no atomic comes from computer science and it means indivisible so an atomic cross chain swamp is a transaction that occurs effectively in a coupled way on both block chains where I’m selling my Bitcoin and buying light coin from another individual and we do two transactions I do a transaction on the Bitcoin network that gives them my Bitcoin and they do a transaction on the litecoin network that gives me an agreed-upon exchange rate amount of light coin we both lock those in with multi-sig and then we have secrets that we can exchange in such a way that they can’t cheat me by taking the Bitcoin and not giving me the like one and I can’t cheat them by taking the light coin and not giving them the Bitcoin and that’s why it’s called atomic either both of those happen or neither of them happens and that way you don’t have to trust the other person you can put up the money worst case they disappear in three days later you just get a refund transaction but if all goes well you can do it swap between so what happens when that becomes completely and fully automated when essentially your currency can transmogrify itself into another currency instantaneously fluidly liquidly the other technology that’s really exciting is the possibility of Lightning Network which is routed payment channels to have multi currency capabilities meaning that you have a lightening channel with some node and you transmit Bitcoin down that lightning channel and at the other end that gets converted and pops out as litecoin so effectively the Chan itself in between house anatomic cross-chain swap is one of its functions and so now you have a multi currency micro payments network that allows you to move any amount even tiny tiny amounts with near zero fees between two currencies at that point what I hope to see is that wallets take over that and you never see it the wallet simply says okay I want to buy something from overstock.com the example you gave query the overstock server what currencies does it take here’s the list what currencies do I have here’s a list which one can I do the fastest lowest cost transaction between the two or maybe in my wallet I’ve actually set it to optimize privacy which is the currency is going to use it’s going to optimize currency or minimize transaction fees or maximize cross-border activity or maximize mixing why not and then my wallet will execute an optimal strategy will convert what it needs to convert into whatever it needs to execute that strategy with a set of payment channels and lightning network channels it has so eventually all of that disappears into the background one of my thoughts is that maybe we start seeing a currency that only exists as a unit of account it’s only hues for pricing and it’s not used for the actual transaction you price everything in that and that just translates on to everything else so who knows if you want to see a world like that go invent it you know that’s basically how open source works anybody who wants to build a wall at like vats is gonna be pretty useful go forth and build you

56 thoughts on “Bitcoin Q&A: Atomic swaps”

  1. Another excellent video, thank you for taking the time and energy to create and post it. Thank you, much appreciated. Merry Christmas to you : )

  2. Great stuff, Andreas!! You're looking at the crypto-scene from much higher above than the average enthusiast. It's a pleasure to hear you speak on these amazing groups of technologies. I find the details to be dizzying, but "the forest" looks incredible.

  3. Is Freewallet a good and safe place to do swaps? I’ve used them a few times to change BTC to LTC. A little expensive though, $27 if I’m not mistaken. Or jaxx wallet?

  4. The "every company will soon have their own coin or token" argument is likened to gift cards in my mind. Store Credit. Store Based Credit Cards "Sears Card". The market is already saturated with these type of things, companies moving towards tokens of value is inevitable and in their best interest. The technological advances, research, development, security, implementation, promotion, marketing, ease of use, adoption, profitability, trust, faith, customer service etc will separate the winners from the losers as always.

  5. Compare to the current system, where just today I had to drive half an hour out of my way, park, wait 20 minutes, spend half an hour showing ID and providing info and answering questions like, "What does this company do? How do you know them? Do you know they are a LLC?" Etc, etc. All for the privilege of paying them $100 to send an amount I could send in BTC in minutes for pennies. Please bitcoin, disrupt the hell out of banking!

  6. Amen. So understandable and encouraging in 6 minutes. Seeing as Im all ADD over here in cryptoland. I think my brain has been atomic swapped a few times ?. More breakdowns whenever possible, need state of the blockchain address lol. Yay logic yay world yay freedom! Thank you!

  7. EVERYONE PULL ANY INVESTMENTS OR FUNDING FROM "CHAIN ANALYSIS"!! THEY'RE HELPING THE IRS FUCK OUR FREEDOM! SALUTE!

  8. The unit of account could be called, "crypto." Imagine a wonderful world where everything was priced in "cryptos." The milk costs 2.50 cryptos and a car costs 20,000 cryptos for example. So when I go to pay for it, I can choose which of my digital currencies to use (say 10% in BTC and 90% in DASH). But wait, there's more! The car dealership said I can get 5% off if I pay in XVG. Great! So in this world, the cashier or whatever might never know what kind of currencies I have, I just pay 100 cryptos for my groceries, but those 100 cryptos = .002 DASH and 500 XVG or whatever. Question: who or what or how would 1 crypto equal whatever actual currency we're talking about? How does the exchange rate get figured?

  9. Enjoyed listening to you on the Joe Rogan podcast! Cryptocurrency is addictive, I need counseling 😛 Your thought on IOTA and tangle?
    LTC LZL56nsBptjXFRhC1SFKKjLrVYURCEEuBo

  10. Hello Sir. Andreas, I watch your videos regularly. I just have one Question. When will BIG investors get in to Bitcoin and when that happens, How will the Bitcoin enthusiasts or Hodlers behave ?

  11. In the end you pretty much described what OmiseGO will do in the near future. What are your thoughts on them?

    Thanks again for the video!

  12. This won't happen because the vampires in our illustrious government have already thought of it. See http://fortune.com/2017/12/21/bitcoin-tax/

  13. Hey Andreas, the unit of account that everything is priced in is USD, or EUR, or YEN, etc.. I agree, the wallet of the future will do it for you.

  14. i mean i get it, but the general public wont untill atleast another 10 years.. i mean they might use it and or be able to use it earlier but they wont understand it.. tho i doubt any of them understands SSL certificates either.. so .. but just saying.. happy new year HODL'rs

  15. My man, un crowned king of the new ' virtual switzerland' for all who have less chances than te 'privileged ones' .
    Keep moving the god stuff around the world!

  16. IMPACT :>) Walking "all u Need 2 Know source! A true (un)polished multifaceted passionate Crypto diamond!
    Modern Robin Hood of Economy. Well educated, interested, experienced Metaphorical connecting our financial past and future from with passion!
    From Technical, Biological, Medical, Economical, Anthropological and IT perspective. Very enriching for navigating (financial) life! Greeting from Amsterdam

  17. This was a great explanation. I was really impressed with how he covered several different topics or touched on them quickly and thoroughly. I just had to subscribe after viewing this. Education is priceless here! #cryptocurrency #AtomicSwaps #BTC #ltc

  18. Idk when I give him/her my secret he/she could decide wheter to make the trade or not. If the price does favor him/her after a certain amount of time he/she will execute the trade if not wait for the timeout. Do I miss something?

  19. Isn't this what Graft is building? Any coin and/or fiat to any coin and/or fiat, multilayered.
    It's 2nd chain is just a unit of account, you can't actually buy or sell those.

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