How Do Atomic Swaps Work?

Agreement You and another person agree to trade,

The Smart Contract A smart contract is created. Think of this as a vault that holds the coins for both of you.

Cryptographic Puzzle The smart contract has a puzzle built into it, and only by solving the puzzle can you unlock the coins.

Time Limit If either of you doesn’t meet the conditions within a certain amount of time, the trade is canceled.

Trade Complete Once everything checks out, the vault opens, and the coins are swapped.