HTLC (Hash Time-Locked Contract)
Quick Answer
An HTLC is a smart contract requiring payment acknowledgement within a set time window, enabling trustless cross-chain swaps and payment channels like Lightning Network.
Full Definition
A hash time-locked contract is a smart contract mechanism that requires the recipient to acknowledge receiving a payment within a set time window by providing a cryptographic proof (preimage of a hash). If the time expires, the funds are returned to the sender. HTLCs enable trustless cross-chain atomic swaps and are the foundation of payment channel networks like Bitcoin's Lightning Network.
Related Terms
Hardware Wallet
A hardware wallet is a physical device that stores cryptocurrency private keys offline, providing maximum security. Leading examples include Ledger and Trezor.
Hash
A hash is a fixed-length string from a cryptographic function used as a unique transaction identifier. Transaction hashes are used to track and verify payments on block explorers.
Hot Wallet
A hot wallet is an internet-connected cryptocurrency wallet for frequent transactions. Payment processors use hot wallets for operational liquidity needed for daily settlements.