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EURK Pilot Test Smart Contract is unavailable for security reasons as of 2nd of April. Therefore, EURK will not be available for buying, selling, and exchanging until further notice.
The problem is being resolved by our team of technicians.
We sincerely apologize for the inconvenience caused.
For assistance and/or to report any incident, please contact our dedicated support team at [email protected]
Please stay tuned and await further updates.
EURK Team
Conditional payments are an essential part of financial transactions, both in traditional systems and cryptocurrencies. Hashed timelock contracts (HTLCs) provide a secure method for implementing conditional transfers of digital assets.
This blog post will explain how HTLCs work, their advantages over alternatives, and some challenges associated with their use. By the end, you'll understand how hashed timelocks enable new applications like atomic swaps between blockchains. Let’s begin!
To understand hashed timelock contracts, we must first explain hashes. In cryptography, a hash function transforms an input of any size into an output of a fixed size. A hash function transforms an input of any size into an output of a fixed size.
A small change to the input will result in a completely different hash. Blockchains rely on hash functions to verify the integrity of data. For example, each block contains the hash of the previous block, linking them together securely.
Hashlocking is the core mechanism that makes HTLCs possible. It allows transaction outputs to be spent only if the spender provides a preimage—the input that generates a given hash.
For example, if my hash is "abcdef," only someone who knows the input "Hello World" can unlock it since hash (“Hello World")="abcdef".
Timelocks are important for coordinated withdrawals in multisig wallets and provide necessary timeouts in HTLCs. A timelock prevents a transaction or smart contract from executing until a specified block height or timestamp.
This prevents funds from being grabbed immediately and forces participants to wait, allowing disputes to potentially be resolved.
In an HTLC, the recipient (B) generates a hash and reveals it to the sender (A). Then creates a crypto transaction output locked with this hash. Only B can provide the preimage to claim the funds.
However, A also adds a timelock to refund the coins back to themselves after a deadline passes. This forces B to promptly resolve the lock or lose their chance at the funds.
A timelock contract allows routing funds across multiple participants, provided each promptly fulfills their obligations. In addition to the refund timelock, participants later add new hashlocks of their own to claim crypto coins from previous ones.
This chains a series of conditional crypto coin movements, allowing global payments without full collateralization upfront.
Timelock contracts enable routing crypto payments across multiple parties through a series of expiring conditional transactions. In practice, a sender would:
This method avoids locking in full payment amounts until the final destination while still ensuring security and settlement finality for all participants.
Hash locking occurs when a transaction output can only be spent by providing the preimage matching the provided hash. Without knowledge of the input that generates that hash, the funds remain locked indefinitely.
This mechanism is what allows hash-timelock contracts to chain conditional payments between multiple parties through carefully crafted scripts.
To summarize the entire process of a hashed timelock contract:
This choreographed dance of expiring conditional transactions enables fast, trustless global cryptocurrency payments across any network or custodian.
Developing robust HTLC applications requires strong cryptography and formal verification skills.
If a node on the relay path goes down before settlement, transactions may become stuck.
Multiple implementations of HTLC exist across blockchains, limiting interoperability.
Large HTLC routing hubs may emerge as critical central points of failure.
Ongoing research aims to address these through standardization, decentralized backup paths, simplified wrapped contracts, and the incentivization of distributed routing.
Lightning Network allows for instant Bitcoin transfers across its global payment network. Over 1,000,000 channels process $5 billion annually.
Trustless crypto trading occurs between unrelated blockchains like Bitcoin and Ethereum without custodians.
WBTC and tBTC are used by services to shuttle assets between Ethereum and Bitcoin.
Marketplaces embed them for dispute resolution in multisig escrow contracts.
Sites that monetize small fees take advantage of the scalability of multihop HTLC routing.
As their adoption grows, new uses for trustlessly coordinating asset movements across digital value flows will surely emerge.
Ethereum's smart contract flexibility allows porting Bitcoin-style HTLCs over to ERC20 tokens. Developers wrap the tokens in a contract, adding hashlocking and refund timelocks, so that balances remain under protocol control until preimages are revealed.
This empowers conditional swaps between any ERC20 assets without custodial holdups—a game-changing feature for automated decentralized finance.
When implemented correctly, hashed timelock contracts are extremely secure mechanisms for fast crypto payments. Key factors ensuring their integrity include:
Of course, implementation details still matter, but conceptually, hashed timelock contracts may be among the most robust tools ever created for coordinating trustless value transfers at scale.
Hashed timelock contracts take conditional payments in cryptocurrency to a whole new level. By allowing choreographed, expiring transactions between multiple intermediaries, they empower instant, global, and trustless payments that were previously impossible.
Projects like the Lightning Network now handle billions in transfers using this technique. As more advancements emerge in cross-chain interoperability, we can expect HTLCs to become even more fundamental in unlocking cryptocurrency's full promise as digital cash for all.
They represent the future of fast, flexible, and secure conditional transfers everywhere tokens flow, both on and between blockchains. EURK's integration of HTLC allows instant low-cost transactions on multiple chains, bolstering accessibility, reliability, and security for all.
EURK is a euro stablecoin that is 1:1 pegged by euro currency. It is a secure euro stablecoin platform and the best euro stablecoin in the market today that you can benefit from with your compatible euro stablecoin wallet.
You can easily make fast, secure, and easy payments with EURK EUR stablecoin as it provides security, stability, and liquidity. Become a partner with EURK today!
