Hashed timelock contracts

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Greetings to you all!

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Hashed timelock contracts are kind of smart contracts that are useful for enabling safe and trustless transaction in between two different parties so hashed time lock contract are utilised in crypto transactions that are specifically used in cross chain atomic swaps. Now I want to discuss behind concept behind hash time lock contracts ,their benefits as well as their applications that where these are using....

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Hashed time lock contract are some of the small contracts that use hash functions and time locks both in combination form for facilitating safe transactions. This contract is specifically designed for giving surety that both parties are fulfilling their obligations and in case if a party is becoming failed to follow a particular obligation then there is also an option of automatic termination of contract. When two opposite parties don't trust each other but still they have to exchange their assets with each other then these type of contracts are used by them.

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Most common component or feature of these type of contract is hash function time log and mechanism of refunding. Hash function is useful for creation of unique identifier for making transaction but time lock is important for telling that for how much period a particular transaction is valueable. Refunding mechanism is permitting parties for recovering their assets if transaction is not going to complete within particular time period that is already determined.

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Some of the important advantages that we can get from these type of contracts are safety security trustlessness and flexibility. We all know that hashed time lock contracts are using hash functions and time lock but still there is no need of any intermediate because both parties try to fulfill their obligations. Moreover these contracts are helpful in giving facilitation for making transactions at different blockchain networks which make them important component of cross chain atomic swaps.

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When we further move on to the applications of contracts then in cross chain atomic swaps these are using widely and atomic or enableing their users for making exchanges of their tokens among several blockchains without any need of intermediate entity so these contracts are playing and important role in atomic swaps by forcing both parties to fulfilling their obligations and by making transactions secure and trustless.

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Hashed time lock contracts are important to use in payment channels in which users are enabled for making different transactions without having any need of confirmation from blockchain so payment channels are using these contracts for giving surety that obligations are fulfilled by both parties and transactions are secure.

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Moreover these type of contracts have also their applications in decentralised exchanges and a centralised finance protocols. When I talk about decentralized exchanges then these contracts are helpful there for facilitation of secure transactions but decentralised finance protocols are helpful for enabling safe lending, borrowing and carrying out other financial services.

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These contracts have some of the limitations like they have complexity which makes their implementation and usage more tough as well as there is also need of more technical expertise in it so their limitation is restriction in their adoption that you can see despite their advantages you get from it.

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Scalability is also one of the major limitation because these contracts are intensive computationally but different researches are going on for development of these contract protocols.So that was all about these contracts introduction, their benefits,their limitations etc.Hopefully everyone understand these concepts about this topic.....

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