atomic swaps

Atomic swaps are a decentralized method for directly exchanging cryptocurrencies between different blockchains without a trusted third-party intermediary. The process involves creating a smart contract called a Hashed Timelock Contract (HTLC) where each party deposits their cryptocurrency, and the exchange is completed by revealing a secret key, allowing the funds to be claimed. This eliminates counterparty risk, enables trading between any cryptocurrencies, provides more privacy, and reduces fees compared to centralized exchanges, though it also has drawbacks like technical complexity, limited cryptocurrency support, and slower transaction times.