Thread by @PortaltoBitcoin

Another day, another thread! The second in a week-long daily series designed to ELI5 Portal's most important tech concepts and vision:

𝗖𝗮𝗻 𝘆𝗼𝘂 𝘁𝗿𝗮𝗱𝗲 𝗕𝗧𝗖 𝗳𝗼𝗿 𝗘𝗧𝗛 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗮 𝗯𝗿𝗶𝗱𝗴𝗲 𝗼𝗿 𝘄𝗿𝗮𝗽𝗽𝗲𝗱 𝘁𝗼𝗸𝗲𝗻𝘀?

Yes, and it’s not sci-fi! It’s called an HTLC.

Here’s how atomic swaps work 🧵⤵️

First: HTLC stands for 𝗛𝗮𝘀𝗵𝗲𝗱 𝗧𝗶𝗺𝗲-𝗟𝗼𝗰𝗸𝗲𝗱 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁.

It sounds intimidating, but it’s based on two simple ingredients:

🔏 A secret (hash)
⏳ A countdown (timelock)

And together, they make trustless trades possible.

Imagine you want to trade BTC for ETH.

Here’s what happens:

1️⃣ You lock your BTC with a secret (hash)
2️⃣ The counterparty sees that and locks ETH using the same secret
3️⃣ When you claim the ETH, the secret is revealed
4️⃣ The counterparty then uses that secret to claim your BTC

Boom 💥 Atomic swap complete 🔄☑️

But what if someone bails?

That’s where HTLCs have your back. If either side doesn’t complete their part within the set time limit, the funds are automatically refunded.

Nobody can get scammed or stuck waiting!

Portal uses HTLCs to create native cross-chain swaps:

BTC ↔️ ETH
BTC ↔️ USDT/C
ETH ↔️ SOL

All directly, all natively, all without giving up control of your assets. So, away with all the wrapping, bridges, and “trusted parties” 🫳🗑️

HTLCs are the reason why Portal doesn’t rely on validators to enforce swaps.

Portal validators help coordinate, but they 𝗻𝗲𝘃𝗲𝗿 𝗵𝗼𝗹𝗱 𝘆𝗼𝘂𝗿 𝗳𝘂𝗻𝗱𝘀 or decide outcomes.

The swap is 𝗲𝗻𝗳𝗼𝗿𝗰𝗲𝗱 𝗯𝘆 𝗺𝗮𝘁𝗵, 𝗻𝗼𝘁 𝗯𝘆 𝘁𝗿𝘂𝘀𝘁. Self-Custody is king, and you retain full control at all times. Remember that one guys!

TLDR - Bookmark this for later!

☑️ No middlemen
☑️ No wrapped assets
☑️ No risk of loss
☑️ Fully non-custodial

HTLCs make atomic swaps work, and Portal makes them real across chains.

Smash the like & repost so we can kick the algo and get more eyes on this much needed DeFi innovation.

And start yapping about Portal & HTLCs too!

We’re not stopping here though, there’s too much happening, so up tomorrow:
“𝗛𝗼𝘄 𝗣𝗼𝗿𝘁𝗮𝗹 𝗹𝗲𝘁𝘀 𝘆𝗼𝘂 𝘂𝘀𝗲 𝗿𝗲𝗮𝗹 𝗕𝗧𝗖 𝗶𝗻 𝗗𝗲𝗙𝗶 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝘄𝗿𝗮𝗽𝗽𝗶𝗻𝗴 𝗶𝘁.”