Knockout is a type of cryptocurrency transaction that allows users to quickly and securely transfer funds without the need for third-party services. It is also referred to as an atomic swap, and it is becoming increasingly popular in the crypto world.
A knockout transaction occurs when two parties exchange coins directly, using only their wallets or accounts. Typically, this type of transaction requires both parties to have access to each other’s wallet address; however, with some platforms such as AtomicDex and Komodo Platform, users can use their own wallets or accounts to facilitate the process. This eliminates any risk associated with trusting a third party service provider (e.g., exchanges).
In order for a knockout transaction to be successful, both parties must agree on three essential components: which currencies will be exchanged (and at what rate), where the funds will be sent from/to (wallet addresses) and how long until completion (timestamp). Once all these parameters have been agreed upon by both sides of the trade, they are then locked into an atomic contract which cannot be amended unless one side withdraws their part of the agreement before its expiration date – otherwise known as “knocking out” of the deal. If either party tries to breach the terms after this point in time has passed then they run into trouble – either risking loss of money due to penalties imposed by certain blockchains or being unable to change/reverse any transactions within said blockchain/smart contract platform’s immutable system ruleset.
Overall, Knockouts provide cryptocurrency traders with quick and secure ways for transferring value between two peers without having to trust a middleman or rely on outdated banking systems that often take days just for transfers between countries!
