Atomic Swaps and Reducing Market Manipulation

This was my hope when I first heard about atomic swaps, but as I dug down more deeply I came to see that AS don't go quite far enough to solve the problem.

The Problem

The problem I see is with how easy it is for large institutional investors from the traditional investment market to manipulate the much smaller crypto market just by manipulating a single coin, bitcoin. That's because there are so few trading pairs.

Just about any altcoin can be purchased with BTC, any ERC-20 token can be purchased with ETH, and there are a few exchanges with trading pairs in Tether or LTC. But for the most part, people are having to trade through BTC to buy what they want, even if they have no interest in BTC itself.

All those stop-limit orders always sitting out there denominated in BTC creates a single point of influence for manipulating the entire crypto market.

So my interest has been making BTC irrelevant except when someone actually wants to own BTC. Manipulating a single currency is easy if you have enough money and enough skill, which these players certainly do. Manipulating 3000 coins with more being released every day? Not quite feasible.

The Hope

When I heard about atomic swaps I thought this would be the answer, because you could swap any two coins for each other without having to think about specific trading pairs being offered by exchanges.

Turns out, not quite.

The problem is that the coins have to be both running lightning network and also have to have the same cryptographic hash function, such as SHA-256. So we're right back to the world of BTC dominance again, albeit with a handful of coins to focus on, not just one.

Now there are still great things about atomic swaps, such as the possibility of decentralized exchanges. Some of this is already in play with coins like Lykke. If your objective is zero transaction fee trades without a centralized authority who can possibly be hacked and lose your coins (or engage in any funny business) then for those coins that can use atomic swaps, great progress indeed.

But it still doesn't achieve my objective of seeing trading activity too diversified to be manipulated.

What do you think will be the way to achieve this goal?

Or do you see a way atomic swaps might eventually evolve to not require the same hash function or LN?

(Photo source: pixabay)

Other articles of mine you may enjoy:

• What is Crypto Really?
• Learning to Receive - Basic Income sources - Can you let it in?
• How to Pick Cryptocurrency You'll Be Happy to HODL

Resteems always appreciated