Editing Kidney swaps (section)

= Ethereum saves the day (again) =

This is a new one for me – but it is possible to create an Ethereum contract that can actually be used to enforce N-party cross-chain atomic contracts on legacy style Bitcoin blockchains in such a way that all transactions taking place on the legacy blockchains use ONLY standard transactions.

Here’s how it works.

You create a special deposit contract on Ethereum that stores the state of four sets of secrets x1, x2, y1, y2. The x variables define refunds, whereas the y variables are for claiming coins. The contract says that before a certain time-frame if you reveal x* or y* all funds are released to the counter-parties. After this time has elapsed you have a set time-frame to reveal either X or Y or all the funds in the contract are automatically distributed to the Ethereum addresses of the kidney-swap participants.

Once the secrets are revealed, the contract enters a settlement phase where it must clear for a set period. During this period if anyone can prove knowledge of the OTHER secret then the contract automatically releases the Ether to the kidney-swap participants. Otherwise, the settlement period elapses and the Ether can be claimed by the original owner.

Now prepare to have your mind blown because '''these aren’t ordinary secrets – they are [http://roberts.pm/pay_for_private_keys pay-for-private key contracts].''' Essentially, the secrets prove knowledge of a particular ECDSA key and what can ECDSA keys be used for? Multi-signature transactions on legacy assets! So essentially, you can now use Ethereum to implement hash-locked atomic swaps on any legacy blockchains with 100% compatibility by using private-keys as secrets.

Further, we enforce time-periods that allow our traders on the legacy blockchains chance to either claim their respective coins OR claim their refunds. This is accomplished by utilizing a special multi-signature address for deposits that looks like this:

<blockquote>3 of 3: owner, x1, x2, future, y1, y2
</blockquote>
<span id="the-three-possible-paths-for-redemption"></span>