It’s still relatively new information that bitcoin addresses are not compatible with lightning ones. This means that users can’t send crypto from a lightning address directly to a bitcoin one, and vice versa. That all can change when the submarine swap technology gets integrated. In order to see how the submarine swap technology can address this issue, let’s look at the core issues:

It’s counter-intuitive, that the two-layer technology for transactions, is intended to revolutionize the protocol to scale – even more users and more transactions. Yet somehow, there is still the incompatibility between the new and old transactions.

Many possible ideas have started to flow around, but one developer, Alex Bosworth is already working on a possible solution. He’s building his project on the interoperability tech known as “atomic swaps.”  If successful, the technology will allow users holding tokens on different blockchains to trade directly. This eliminates the entire risk of one party “taking off” with the other’s money before the trade is finished.

The technology is called “submarine swaps” and is currently ongoing live testing on the lightning network. Keep in mind that even though you can use it, it’s still extremely untested. The lightning network by itself is a very new technology and trying out the network at this time is not recommended.

In order to progress on his own work, Bosworth has set up a connection between the lightning network and the bitcoin blockchain. At the moment it only supports money being send from the blockchain to the lightning network. It’s not known when the reverse path will be made use of. Swapping from lightning to blockchain will without a doubt be available soon and will quickly be integrated into every wallet. Bosworth believes that in the near future, every wallet will support the technology. A wide-scale implementation would mean that any coin can be send to a lightning address.

The submarine swap technology has the potential to change payments overnight

The technology, will probably have some needs as well. One such need is the “refilling” of lightning channels. This will be a pesky issue, because users need to set up channels with a set amount of money. This also has transaction fees, which unfortunately surge when there are more crypto transactions.

If you set up a channel for $50 worth of crypto, you can quickly use the funds because of transactions. So how to avoid opening up an entire new channel and paying more fees? A cheaper alternative would be to top up the existing channel with a submarine swap, effectively trading on-chain funds for extra off-chain ones.

If we look at the possibilities: a website like satoshis.place is made entirely for lightning payments. With the implementation of submarine swap, users will be able to pay in any coin they wish.

There will also be interesting possibilities for crypto-to-crypto exchanges. Atomic swaps are currently seen as the main technology, but submarine swaps will improve the job exponentially. This is mainly due to the fact that in order to make an atomic swap, both cryptocurrencies need lightning enabled. At the moment there aren’t that many cryptocurrencies with a functioning lightning network. Submarine swaps will require only one side to have implemented the lightning network. This will lighten developer work by a huge margin.

Earlier this year, Bosworth shared many of his hopes and visions for the future development. There is a long road ahead before his envisioned future can come to pass. We can only hope that the many challenges he faces, will eventually be overcome and many people throughout the world, will enjoy the benefits of this new and exciting technology.

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