What Is An Atomic Swap? – The Guide To Getting Started
What is an atomic swap and how does it work? To put it simply, an atomic swap is a way of moving data from one system to another. It is similar to swapping around your credit cards, which means you are moving some information about your outstanding balances to the other account. In the case of swaps, you are moving data on and off the network. For example, let’s say you are looking to transfer some cash to your sister’s account because you will be coming back from a vacation and won’t be able to access her bank until mid-afternoon.
You would use a cash-to-cash transfer agent like MoneyGram to send her a prepaid visa debit card. Once she has the card in her possession, she can access her account and make the exchange. As long as she has her card, she can do all of this without needing to have the cash for the transaction. Once she puts the card down, you won’t know she did it – nor will she, since she can’t access her account.
How is this done? Simple – online transfers are often done using what is called a “swap”. An atomic swap is also known as a “core swap” or an “atomized swap”. A “core swap” is when two or more transactions come together that require the same asset (usually a financial instrument) – and when they do, the entire transaction takes place within the same system.
To make an atomic swap, there are only two parts to the process. First, the financial institution where you would like to make the swap must be accredited. The second part is to come up with someone who is willing to go into a specific physical location to receive the funds. This person, called the exchange, must be a direct employee or representative of the institution with which you want to do the swap.
There are some cases where online transfers can happen without this step. For instance, suppose there was a power outage in your home or office. Instead of having everyone evacuated, and risking being robbed, your business or home would remain open for business. You would just contact a facility such as the Electricpee Company and set up a swap. They would send someone over to your location to collect your fee for the power outage, and then they would disconnect.
If you decide that you want a more secure transaction, you can incorporate features into your atomic swap contract. For instance, you might include a “rider” that ensures your transaction is carried out even if a portion of your customer list decides to pull out of the deal – due to a number of reasons. In order for this rider to work, you must include a clause that creates an enforceable agreement. This means that even if one or more of your customers pulls out, you will still be paid. Of course, the amount you would be paid varies – but it is in your best interest to ensure that any agreement you enter into puts you at a competitive advantage in the market.
Of course, it is also important to keep in mind that what is an atomic swap transaction isn’t something that you can start up – or modify, should you choose to do so. The Atomic swap itself is already set up. The only thing you need to do is sign up for an account with an exchange that facilitates this type of transaction. Then you can use your account to make money from various atomic swap transactions, as well as from the other features offered by the exchange.
One of the nicest aspects of what is an atomic swap is that you don’t have to know anything about computers to get started. In fact, you can get started with absolutely no capital whatsoever. The process is actually made much simpler by the fact that the company that offers you the swapping service actually provides everything you need to get started. Once you have signed up for an account, you can access it with just a few clicks. You won’t even need to type in any information – you’ll just click “start” and watch as your account is immediately updated and ready to go.
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