Enabling Cross-Chain Transactions: A Decentralized Cryptocurrency Exchange Protocol

Abstract

Inspired by Bitcoin, many different kinds of cryptocurrencies based on blockchain technology have turned up on the market. Due to the special structure of the blockchain, it has been deemed impossible to directly trade between traditional currencies and cryptocurrencies or between different types of cryptocurrencies. Generally, trading between different currencies is conducted through a centralized third-party platform. However, it has the problem of a single point of failure, which is vulnerable to attacks and thus affects the security of the transactions. In this paper, we propose a distributed cryptocurrency trading scheme to solve the problem of centralized exchanges, which can achieve secure trading between different types of cryptocurrencies. Our scheme is implemented with smart contracts on an Ethereum blockchain and deployed on an Ethereum test network. In addition to implementing transactions between individual users, our scheme also allows transactions among multiple users. The experimental result proves that the cost of our scheme is acceptable.