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Hash Time-Locked Contracts (HTLC)

Hash Time-Locked Contracts (HTLC) are smart contracts which require both parties to acknowledge receipt of funds within a specific timeframe/deadline by generating a cryptographic proof of payment. If one party fails to confirm the transaction within the timeframe, then the entire transaction is voided, and funds are returned. This eliminates counterparty risk, or the risk that one party will accept the offered coins and decline the transfer of their coins.

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