You can now hold Bitcoin BTC and swap back and forth with NIM using non-custodial atomic swaps!
19 Nov 2020
You can now add Bitcoin to your Nimiq accounts, including the ones on your Ledger hardware wallet! When you open the wallet for the next time after this update, you will get a popup asking you to activate Bitcoin. If you later on create a new account or log in with an existing account, Bitcoin support will automatically be enabled for you.
Your Bitcoins are secured with the same Login File, recovery words and password as your NIM!
Here's what it looks like:
Since Bitcoin has a different approach towards reusing account addresses than Nimiq, each account in the Nimiq Wallet shows one aggregate Bitcoin balance summarizing all used addresses. Everytime you send or receive Bitcoin, a new address is generated, avoiding address reuse — a best practice in Bitcoin. This mainly has privacy reasons and is due to the UTXO system used in Bitcoin, while Nimiq uses an account system similar to Ethereum.
To connect and sync with the Bitcoin network, the Nimiq Wallet uses the same mechanism as the Electrum desktop wallet, namely the network of ElectrumX servers, provided by institutions and individuals around the world. An upcoming post will go more into the technical details of how we made this work in the browser.
You can get started by using the Nimiq Wallet and easily swap between BTC, the most well-known cryptocurrency, and NIM, the high-performance payment coin. This new atomic swap feature is powered by Fastspot, technology built by Nimiq. We will give you more in-depth information about Fastspot in a future blog post.
Fastspot enables atomic swaps, which are a non-custodial way of exchanging two assets, without any participant having control over both of them at the same time.
"Atomic" in this context means that the swap either completes successfully, or both parties get their assets returned. To learn more about the security of HTLC-based atomic swaps, check out this article for an in-depth explanation.
To set up a swap, you can either move the slider to set a new ratio between your NIM and BTC holdings, or specify an amount in the input fields. You'll then get a quote from Fastspot that is calculated on the spot. The swap fees are displayed at the top — just hover your mouse over the fees (tap on mobile) — and you’ll get more details on the fee composition.
This is an “Early Access” to the swap functionality and thus comes with a 30-day volume limit of US$1000 for every account. Since each swap requires two HTLCs, one on the Bitcoin and one on the Nimiq blockchain, and each HTLC requires two transactions, one for locking up the funds and one for taking them out — network transaction fees are important. At times, Bitcoin transaction fees can get expensive, but with the limit as high as US$1000, the swap fees are actually still very low in comparison.
We plan to offer higher limits in the future. However, we can not yet share a date for when this will be available.
While some focus on comparing BTC and NIM, we are convinced that there is room for both in the crypto space. As a matter of fact, Nimiq and Bitcoin complement each other as they target different use-cases and coexist perfectly:
Bitcoin, with its slow transaction time, higher cost per transaction, but very high hash power — and thus security — behind it, is a store of value, comparable to gold. People rarely use it to pay daily expenses or go shopping, but instead invest in it for its longer-term stability.
Nimiq, with its high speed and low cost transaction combined with high throughput in the up-coming switch to Proof-of-Stake, is the high performance payment coin, replacing cash or credit card in your pocket for everyday payments between friends and family. The switch to Proof-of-Stake in Nimiq 2.0 will also provide a predictable income stream in the form of staking rewards. This is comparable with interest, that if you are lucky :) you are used to getting from your bank. The significant difference is that you never give up control over your money when staking with Nimiq and you always get a positive rate.
We hope that you'll enjoy our brand-new atomic swap experience and appreciate the non-custodial nature of this unique technology. As you might know, the NIM/BTC swap is only the first release of a series of other exciting atomic swap pairs to come - so stay tuned for more news and updates!
Happy swapping and Pura Vida!
None of the statements must be viewed as an endorsement or recommendation for Nimiq, any cryptocurrency, or investment product. Neither the information, nor any opinion contained herein constitutes a solicitation or offer by the creators or participants to buy or sell any securities or other financial instruments or provide any investment advice or service. All statements contained in statements made in Nimiq’s web pages, blogs, social media, press releases, or in any place accessible by the public, and oral statements that may be made by Nimiq or project associates that are not statements of historical fact, constitute “forward-looking statements”. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual future results, performance, or achievements to be materially different from any future results, performance, or achievements expected, expressed, or implied by such forward-looking statements.