Transferring, Swapping, and Wrapped Cryptocurrency

(Originally Posted August 2nd 2023)

There are a variety of ways to ‘move’ one currency to another currency or even to a different blockchain. If the cryptocurrency is native to that blockchain then it should be an easy process to simply ‘convert’ one currency to another with no real hassle. But if the desired currency is on an entire different blockchain then things get a bit delicate. There are sites that use participants to offer their services for ‘Swapping’ one coin for another. This system is similar to a job board, the swap transaction is put on a list for a ‘fee’ price and the participants that do the actual swap can select if they want to do the job. Once the job starts it’s only a matter of time until the transaction is complete and the swapped coins are available to the one who wanted the transaction to take place.

Wrapped tokens are similar to casino chips in concept, everybody can see you have them and they have a value but they have to be cashed out at the counter to acquire what they represent. ‘Exchanges’ are usually the places that accept wrapped tokens. It’s supposed to be a seamless method for transferring currencies without much fuss but there are some nuances to it.

Although this method requires a participant to have access to all their accounts on the different blockchains, another method would be to acquire a secondary token that is accepted on a variety of Blockchains and cash out the tokens on the desired blockchain. The transfer rates might vary and proper research should be done on the token-to-currency conversion before trying this method.

The options are there but the chances of currency becoming ‘lost’ due to a mistype of a wallet address or a mistake in the system transference can be quite high. Start small and do research to make sure there is an understanding of what method is required.

Helpful Links: 

https://www.kraken.com/learn/what-is-a-blockchain-gas-fee – an explanation of what the ‘Fee’ is for currency validation.

https://coinmarketcap.com/alexandria/article/the-beginners-guide-to-token-swaps – Like it says: Beginners guide to swapping. Good luck!

https://www.ledger.com/academy/what-is-wrapped-crypto – Overview of wrapped crypto.