Atomic swaps are a big deal. Even the mere promise of their arrival can have grave implications for the value of your cryptocurrency holdings. You would do well to learn about them.
Atomic swaps offer the potential to swap two assets on different blockchains, such as Bitcoin and Litecoin, provided they share the same hashing algorithm, such as SHA-256. You don't really need to know what that is; the key info is that there are a lot of coins that are compatible with each other.
For example, say you have Bitcoin and another party has Bitcoin Cash. You want to trade without counterparty risk. Currently, you would each have to send your coin(s) to an exchange, sell/trade them there, then withdraw them back to your (hopefully secure) cold-storage. Net result: you each make two transactions, two per network total, and you are each exposed to the counter party risk of your chosen exchange.
Atomic swaps hope to allow you to make that transaction directly with the other party via smart contracts called HTLCs - hash-time linked contracts. In other words, a timed escrow which will result in both parties exchanging directly with no trust. The end result will be half the transactions (only one per chain), and therefore half the fees, and no exposure to exchange risk.
They also may be coming fairly soon, as noted by Bitcoin.com only yesterday: (note: Bitcoin.com is fairly pro-BCH)
They may solve grave problems with some coins (looking at you, $19 BTC fees) or even render the competitive advantages of others potentially moot (Bitcoin Cash?) The market does not seem currently to be bothered by BTC's transaction speed and fees, so surely a 50% speed increase and fee reduction can only buy BTC even more time to scale.
This may not be a good thing for Bitcoin Cash. Though the chart looks bullish, you may have heard it here first - atomic swaps could be negative for Bitcoin Cash, even though Bitcoin Cash is compatible to swap with Bitcoin! Of course, it could also be bullish. It's difficult to tell where we are in this crazy market:
If you would like to see a more detailed run-down of the contract process, along with some of the limitations, all told via Barbie and Ken, please see this link:
http://popeller.io/index.php/2016/09/28/atomic-swaps/
If you have any additions or errata for this post, please let me know! I will see that they are voted to the top of the comments, and will make the appropriate edits (if possible).
We also have a Radio Station! (click me)
...and a 5000+ active user Discord Chat Server! (click me)
Sources: Bitcoin.com, Crypto-Compare, Google
Copyright: quarkcoins.com, popeller.io