Re: Atomic swap? Objection: I don't think it means decentralized coin exchange.
Anyway, done is done and most of the coins do not support AT inherently (actually a majority of coins even do not support CLTV, bitcoin before 0.11 for instance) but does it make cryptocurrency exchange world better if they would?
I think yes, because the cryptocurrency movement is "all about decentralization". Exchanges are the most annoying single point of failure. There are obviously trading methods and strategies (high frequency trading, stop orders etc.) that could never be sa replicated in a decentralized manner in a satisfying way, but for the day-to-day exchanges a normal user does, it would be very useful.
If fiat-pegged coins like BitUSD become more common and allow atomic swaps to Bitcoin and other important cryptos, even "entering the cryptocurrency ecosystem" could be easier, because the whole work of "finding a price" would not be necessary anymore in the moment you buy your first cryptocurrency.
Atomic swaps between cryptos and pegged currencies is a very good idea but the hypothetical wallet capable of supporting the protocol will be suffered from the same scalability problems discussed earlier and wont help with the trust issues with the pegged currency, at least as a direct consequence.
I understand why you emphasis on 'important cryptos', it is to eliminate scalability problem, but I don't get why you suggest this kind of 'pruning' for pegged currencies only and you don't go general. I mean it can be considered a kind of a solution to have crypto blockchains being somewhat clustered and for an arbitrary pair of cryptos to be exchanged both parties should find the shortest path between them and navigate by means of multiple swaps.
I am seriously falling in love with this idea: crypto coin blockchains being clustered!
- Every coin to be present in swap operations have to support at least one cluster.
- A cluster consists of 2 or more coins that their full nodes are capable of verifying transactions on all the member chains and participate in Atomic Swap
transactions.
- A cluster is matured when it has at least one member coin (blockchain) that is a member of another matured cluster.
Obviously this topology resembles a connected multigraph and can be studied in details mathematically but more importantly, here we have overcome scalability challenge by eliminating the need for every node in every coin to be capable of verifying every arbitrary other blockchain (eventually as a full node).
Now the new challenge comes around:
For Bob and Alice to exchange their coins after finding a path between the respected chains, in the current state of the art, both parties should have wallets and (possibly) deposits on all the intermediate coins in addition to their owned ones. It is not what they want at all.
I have proposals for this but for the moment I prefer to check with you guys whether I'm in a good direction right now.
