We will comment about crypto swaps and particularly Atomic Swaps, a new way to do cryto swaps today. With that being said, how do atomic swaps work? Atomic swaps use a specific type of smart contract called a hash timelock contract (HTCL). This can be thought of like a “virtual lockbox” requiring two special keys: A HashLock key: That only distributes traded cryptocurrency to traders when all parties have signed off on their respective transactions. A TimeLock key: A safety mechanism that returns traded cryptocurrency to traders if the trade is not completed within a specified time period.
The digital market is relatively new, so countries and governments are scrambling to bring in cryptocurrency taxes and rules to regulate these new currencies. If you’re not aware of these before you start trading, you may find yourself in a spot of expensive bother further down the line. Many governments are unsure of what to class cryptocurrencies as, currency or property. The U.S in 2014 introduced cryptocurrency trading rules that mean digital currencies will fall under the umbrella of property. Traders will then be classed as investors and will have to conform to complex reporting requirements. Details of which can be found by heading to the IRS notice 2014-21. On top of the possibility of complicated reporting procedures, new regulations can also impact your tax obligations. The U.S, the ‘property’ ruling means your earnings will now be deemed as capital gains tax (15%), instead of normal income tax (up to 25%). Each countries cryptocurrency tax requirements are different, and many will change as they adapt to the evolving market. Before you start trading, do your homework and find out what type of tax you’ll pay and how much.
Alexandra creates the value and generates its hash which is used to create the contract address and deposits her BTC there. She then sends the hash to John. John then generates the contract address through the hash and sends his LTC there. In order to get her hands on the LTC, Alexandra will have to unlock the address by using her value. Upon unlocking and getting her coins, the value of the key is given to John. John then uses the value to get his coins. Atomic swaps, as we have stated earlier, can either be conducted on-chain or off-chain. Read additional details at Crypto Swap.
Changelly is one of the best-known platforms, delivering a fixed-rate mechanism that protects against the risk of market fluctuations when tokens are being swapped. Changelly claims the stability is assured by integrating a small reserve inside the exchange rate when the final quote is given to the user. This month, the platform launched an iOS app as well as a second version of its Android app, making it even easier for users to convert coins on the go. Another very good pick is Atomiic.io.
The Atomiic.io team is glad to welcome you at our service. We have done the process of cryptocurrency exchange simple, safe and comfortable. Our customers don’t need to create accounts or store their funds at Atomiic.io. We offer swaps of more than 300 cryptocurrencies. Our team is always glad to add new coins to the Atomiic.io list of currencies and is looking for new partners to make our platform even better. Visit: https://atomiic.io/.