ColossusXT (COLX) Moves Towards a Decentralised Future
Atomic Swap Capabilities
In light of the growing number of vulnerabilities associated with the exchanges, the ColossusXT Development Team decided to take a step towards greater decentralisation. To do this they implemented BIP65 in their COLX Core v1.0.4 Wallet Release, which now allows for Atomic Swaps. BIPs are ‘Bitcoin Improvement Proposals’ and BIP65 was a ‘softfork’ which was activated on the Bitcoin Core network in December 2015 to enhance the way it which it deals with future based transactions and authorisations. The new opcode (OP_CHECKLOCKTIMEVERIFY) for the Bitcoin scripting system allows a transaction output to be made unspendable until some point in the future which is how the new atomic swap systems have been developed; a lot like a built in, fully-automated, escrow system.
What are Atomic Swaps and why are they important?
Atomic Swaps, or atomic cross-chain trading, is a technology that enables direct peer-to-peer trading across separate blockchains with BIP65 support, thereby totally eliminating the need for a third ‘trusted’ party. Traditional centralised exchanges are replaced by decentralised exchanges, which means that you always keep your funds in your wallet and do not have to rely on an intermediary that represents a potential single point of failure in the current world, filled with governments trying to shut down exchanges, frequent hacks/security breaches and diminishing privacy.
How does it work in plain English?
Alice has some traceable coins, e.g., Bitcoins or Litecoins but she cares about her privacy and would like to exchange them for ColossusXT (COLX) coins. Bob is less concerned about his privacy, so he is willing to buy the coins from Alice. With Atomic Swaps they can trade directly with each other, bypassing the centralised exchange; the one that is scheduled to be shut down any minute now by some government that is hostile to crypto.
One Final Note
By enabling Atomic Swap capabilities, ColosssuXT takes yet another proactive step forward towards a decentralised future. In that respect, ColossusXT believe that decentralised exchanges will be a very important part of that future and, in the coming weeks and months ahead, will continue to collaborate with pioneers in this field, such as Komodo’s BarterDex.