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Bitcoin Q&A: Atomic Swaps - YouTube
Channel: aantonop
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I thank you so much for uh kinda Chicago
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to speak but shouldn't all the points
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now million with someone like overstock
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who's a major corporation they're just
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starting off their own coin isn't going
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to be a little much to to manage it for
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the average user I think they need a
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coin to buy things from overstock to buy
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things over to buy things from you know
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let's say yes an average user buy
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something from the 50 different brands
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so I think it's important to realize
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that as part of the transition towards
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fully programmable digital money one of
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the things you are changing is this idea
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of having very high switching costs so
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switching costs an economic sense and in
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as a term used in economic switching
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cost is the cost to switch to a
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different competing system right I'm
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with Comcast I want to be with oh wait
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they bought all of them I'm with I can't
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find a single example of competition so
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the theory in economics is that when you
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have to substitute goods and you try to
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switch between them one of the
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considerations is the switching cost
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right now so what is the switching cost
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with traditional currencies is actually
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quite high if you want to switch from
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you know USD to euro from euro to yen
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there's some significant switching costs
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in fact and for many people around the
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world the switching costs are equivalent
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to infinity because it is illegal or
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highly controlled as to who can use
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multiple currencies so what happens in a
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world of digital programmable money is
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that the switching costs drop to zero
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and if you have liquid systems that can
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be swapped so one of the technologies
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that I'm really excited about now is the
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application of payment channels and
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simple smart contracts to do what are
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called atomic cross chain swamps who's
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heard of that term before okay so an
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atomic cross chain swap is when you take
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two chains and you nuke one of them no
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atomic comes from computer science and
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it means indivisible so an atomic cross
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chain swamp is a transaction that occurs
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effectively in a coupled way on both
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block chains where I'm selling my
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Bitcoin and buying light coin from
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another individual and we do two
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transactions I do a transaction on the
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Bitcoin network that gives them my
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Bitcoin and they do a transaction on the
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litecoin network that gives me an
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agreed-upon exchange rate amount of
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light coin we both lock those in with
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multi-sig and then we have secrets that
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we can exchange in such a way that they
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can't cheat me by taking the Bitcoin and
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not giving me the like one and I can't
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cheat them by taking the light coin and
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not giving them the Bitcoin and that's
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why it's called atomic either both of
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those happen or neither of them happens
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and that way you don't have to trust the
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other person you can put up the money
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worst case they disappear in three days
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later you just get a refund transaction
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but if all goes well you can do it swap
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between so what happens when that
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becomes completely and fully automated
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when essentially your currency can
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transmogrify itself into another
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currency instantaneously fluidly
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liquidly the other technology that's
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really exciting is the possibility of
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Lightning Network which is routed
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payment channels to have multi currency
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capabilities meaning that you have a
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lightening channel with some node and
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you transmit Bitcoin down that lightning
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channel and at the other end that gets
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converted and pops out as litecoin so
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effectively the Chan
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itself in between house anatomic
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cross-chain swap is one of its functions
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and so now you have a multi currency
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micro payments network that allows you
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to move any amount even tiny tiny
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amounts with near zero fees between two
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currencies at that point what I hope to
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see is that wallets take over that and
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you never see it the wallet simply says
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okay I want to buy something from
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overstock.com the example you gave query
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the overstock server what currencies
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does it take here's the list
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what currencies do I have here's a list
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which one can I do the fastest lowest
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cost transaction between the two or
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maybe in my wallet
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I've actually set it to optimize privacy
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which is the currency is going to use
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it's going to optimize currency or
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minimize transaction fees or maximize
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cross-border activity or maximize mixing
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why not and then my wallet will execute
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an optimal strategy will convert what it
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needs to convert into whatever it needs
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to execute that strategy with a set of
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payment channels and lightning network
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channels it has so eventually all of
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that disappears into the background one
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of my thoughts is that maybe we start
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seeing a currency that only exists as a
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unit of account it's only hues for
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pricing and it's not used for the actual
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transaction you price everything in that
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and that just translates on to
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everything else so who knows if you want
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to see a world like that go invent it
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you know that's basically how open
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source works anybody who wants to build
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a wall at like vats is gonna be pretty
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useful
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go forth and build
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you
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