Direct Cryptocurrency Exchanging without a Third-Party: Bitcoin and Zcash
The new command-line tool ZBXCAT can be used to directly trade two cryptocurrencies – in this case bitcoin with zcash with no need of a third party that functions as a centralized exchange.
The blockchain network project is being developed by Ariel Gabizon and Jay Graber (ZCash Devs) that could one day change the whole system on how trading functions nowadays.
It works under a concept known as “atomic swaps” which evades the need of holding the user’s funds while the trading will be done in a specific time period as soon as both users will be confirming the exchange.
A. Gabizon stated:
“Basically, it seems a useful thing to me: To be able to exchange bitcoin and zcash directly with someone I don’t know without having to trust them. Especially, given recent technical problems some exchanges are having.”
In its current state, ZBXCAT users need to download bitcoin and zcash full nodes (with their full transaction histories), and use the command line to instruct the network to make a trade.
As for the time of initiation or the phase which the project is now, “Test Coins” are recommended to be used by the developers.
A similar concept is introduced by the creator of Litecoin – Charlie lee that pronounced his interest in atomic swaps once Lightning Network is enabled in the blockchain network.
“Version 0.3 of LND added a Litecoin operating mode as a step towards multi-chain Lightning Network for cross-chain atomic swaps. I’m working with [Litecoin Foundation Directors] Xinxi Wang and Franklyn Richards today to test out Lightning on Litecoin mainnet. Any real litecoins lost will be worth it,” Lee said.
Next to the two-above mentioned as the latest projects for exchange-free trading developments incomes MimbleWimble project that has a plan to implement atomic swaps in cross-chain trading.
“I can’t predict how it will be used exactly, I hope it will be integrated in other services in interesting and unexpected ways,” Gabizon concluded.