Storing a cryptocurrency is easy, you only need the private key. As well as keeping an eye on the stake and maybe using a custody service. But it is also important to know the cryptocurrency “swap”. Why do blockchain and cryptocurrency exchanges appear?
With the development of blockchain technology, more and more projects are launching the main net. The token for the project will go through a conversion to a newly released mainnet-based token. This is the ‘Token Swap’ because it replaces the token with a new mainnet-based token.
According to 101blockchains, mainnet itself is the main blockchain network in which actual transaction happens. Simply, it is the blockchain that transfers cryptocurrency between traders.
For example, Klaytn’s non-app partners recently changed their token base from Etherium to Klaytn, a case in point of main net token swap.
How this token swap works in cryptocurrency market
The token swap is done to change the basis of the token with the launch of mainnet like this, but it also happens for fast trading. Generally, you have to use the exchange to exchange tokens. However, using the atomic swap does not require going through the exchange. Cryptographic currencies in different chains can be exchanged without going through the medium of exchange.
To put it simply, Atomic Swap is a technology that allows the conversion of one Bitcoin into hundreds of Ethereum without the need for an exchange.
Atomic swap uses a multi-signature address function and has time lock function using the lightning network. While keeping transaction records in off-chain, it is a way to safely trade coins using the conditions of return fund in case of a transaction failure. And users will get a unique number not unlike a password to enter a coin when they found one. This allows users to exchange tokens safely without the risk of hacking.