You can now exchange bitcoin and monero between blockchains without intermediaries

Key facts:
  • The protocol is based on adapter signatures.

  • These transactions maintain resistance to censorship, anonymity and do not require permission.

On May 28, the developer team of Comit, a protocol that facilitates interoperability between blockchains, reported that it is ready to perform atomic exchanges between the Bitcoin (BTC) and Monero (XMR) networks.

Monero is one of the most private blockchains out there today. For this reason, multiple regulated exchanges have stopped trading their cryptocurrency as their degree of privacy is not to the liking of regulators. Now, thanks to this development, users can exchange Bitcoin directly to Monero while maintaining privacy without the need to use intermediaries.

The team been working in this for a long time and until recently it was believed that it was not possible due to the lack of support for Lockdown Contracts for Hash and Time (HTLC) in Monero.

Thanks to Joël Gugger (also known as h4sh3d) who has been working on the subject for more than two years, it became known that atomic swaps can be done using HTLC on only one of the two chains.

The adapter firms

The protocol created by Comit is based on adapter signatures. These are additional signatures that are combined with an initial signature to reveal a secret piece of information. They allow two parties to reveal two pieces of data to each other at the same time, which solves the trust problem involved in simultaneous transactions.

An example would be, Alice and Bob agree to make a transaction. They both lock their coins. Then Alice gives Bob an adapter signature with HTLC and the amount of BTC to Bob. Since this is not a transaction signature, it cannot be spent yet, but is committed to a secret value.

Now Bob creates his transaction and sends Alice an adapter signature with the amount of XMR. After Bob reveals his signature, by doing this both of them can redeem their coins. If something did not work, everyone could recover their coins without problems.

The following diagram shows a transaction for atomic exchanges from Bitcoin to Monero. Above: transaction scheme for Bitcoin. Bottom: transaction scheme for Monero.

With this system, the asset is released at the same time for both parties, once the exchange is done. Transactions indistinguishable from any other multi-signature on the blockchain.

Interoperability between different blockchains

An atomic exchange allows the exchange of two currencies of different blockchains safely and without intermediaries. Too the original basic principles of Bitcoin are respected: censorship resistance, anonymity and without permission. It is a closer step towards true decentralization.

Thanks to advances in cryptography, new protocols have been created to connect different blockchains that at first seemed incompatible. This was the case with Monero and Bitcoin, and now it is possible.

In a document published by Comit in February of this year, it is explained that “by applying adaptive signatures to the Monero signature scheme, we make possible atomic swaps in which the party that owns BTC is no longer vulnerable to drain attacks.”

COMIT is an open protocol that facilitates cross-blockchain applications without the need to trust the counterpart or some intermediary. For some months now, the team has been testing to implement the atomic transactions that are finally possible today, a fact that was reported months ago by CriptoNoticias.

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You can now exchange bitcoin and monero between blockchains without intermediaries

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