Bitcoin Atom (BCA) cut itself from the original Bitcoin blockchain in another controversial hard fork (a hard fork is a permanent software divergence from the previous version of the blockchain). Bitcoin Atom introduces the Atomic Swap as a means to potentially disrupt the current exchange-based buying and selling paradigm.
The new technology allows owners to exchange their Bitcoin Atom for another currency without the use of an exchange. This effectively removes the middleman from the equation and reduces transaction fees for the user. An atomic swap is a simple two-step process that involves placing an order inside your node and then receiving your exchanged cryptocurrency. In this case, the exchange either happens or it does not. Anxiety is reduced because transactions are not in the hands of an exchange, whereby having more parties involved, increases the likelihood of an error occurring and also incurs trading fees.
Additionally, Bitcoin Atom promises to have lightning network swaps to allow instant transactions and cost-effectiveness for small payments. Making a small payment with Bitcoin not worthwhile because the transaction fees have ballooned to the double digits.
Atomic swaps support the notion of a decentralized trading system because the exchanges are centralized, and this centralization and control over trading via accounts creates reliance on the exchanges, which essentially takes the entire decentralization concept that cryptocurrency offers and refutes it by giving control to the exchanges. Exchange users give up privacy and control of their assets. For example, an exchange does not support a new forked coin–as it happened with Coinbase and Bitcoin Cash when it was first forked–and account holders might not be able to receive their forked coins.
Bitcoin Atom uses a hybrid consensus model that combines Proof of Work (POW) and Proof of Stake (POS) to increase network stability and reduce the power of the miners. The above different algorithms are used to reach consensus or agreement, transaction validity before it is added to the blockchain, this is part of the mining confirmation process.
Over a short period with two major hard forks, Bitcoin has seen its share of controversy. Forks happen because miners and software developers attempt to solve problems with the current blockchain technology. On one side of the fork is the new, upgraded blockchain (in this case: Bitcoin Atom), and on the other side of the fork is the old path (the original Bitcoin). There have been several hard forks over the past year, each creating a new version of Bitcoin that circulates alongside the original. In 2017, two separate hard forks created Bitcoin cash, the most famous/infamous, and lesser-known Bitcoin Gold. Each with their own unique features. For example, Bitcoin Cash has larger block sizes and can process transactions faster and for lower mining fees. Bitcoin Gold is easier to mine with any GPU.
At first Bitcoin Cash was seen as a “digital dividend” with no real potential but then gained enough value to become the third largest currency by market cap. After Bitcoin Cash broke down the door and the market is maturing, Bitcoin Atom has some great potential with its technology offerings to take gain acceptance and possibly disrupt the current exchange-based buying and selling of cryptocurrencies.
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Last modified: May 20, 2020 9:09 PM UTC