First Trustless Swap: On-Chain BCH Used In a Submarine Swap For Off-Chain BTC
A new first was made in the cryptocurrency world this week. The Reddit user Darkdeepths made an on-chain BCH transaction for off-chain BTC and posted about on r/btc. This was the first trustless swap ever made using these two assets and the submarine swap protocol made by Alex Bosworth.
Basically, the Bitcoin Cash was traded using the Lightning Network for off-chain BTC. According to the post, Darkdeepths was interested in Bosworth’s submarine swap and decided to test it for himself to see if really worked.
The submarine swap protocol is an atomic on-chain and off-chain platform that was made by Bosworth with hopes to allow someone to use on-chain funds to pay for an off-chain invoice using the Lightning Network. Recently, Jason Wong made an on-chain Litecoin trade for off-chain BTC using this technology.
According to Darkdeepths, he created a Lightning wallet on Moneni.com and generated a LN invoice there. Then he entered the invoice and paid for the script. The service returned a payload with a redeem script and the block height, so he could claim a refund in case it did not work, but all worked as expected.
New Technologies Like Atomic Swaps and Plasma Trading May Invigorate Decentralized Exchanges
Darkdeepths’ experiment was a top post on r/btc for a while and seemed to spark some interest in the community. According to the poster, the transaction should probably work on the other way around, too, if you request Bitcoin Cash for Bitcoin core on the Lightning Network.
Ideas like this one are generally invigorating for the cryptocurrency market as it may make other people realize the possibilities of trustless trading and truly decentralized exchanges. With technologies like atomic swap and plasma, traders are now able to make transactions without actually needing third parties so much.
This may change the market for decentralized exchanges and help the companies which are basing their businesses on some form of cross chain swap.