An atomic payment is a type of financial transaction that is guaranteed to be either fully completed or not completed at all. This means that the funds involved in the transaction will either be transferred in full or not transferred at all, with no partial transfers allowed.
In this context, “atomic” is used as an adjective to describe a payment that is indivisible and cannot be divided. It’s not an acronym or a short form. It’s used to emphasize the “all or nothing” nature of the transaction.
Atomic payments are most commonly used in situations where the failure of a transaction would cause significant problems. Some examples include:
- Online marketplaces and e-commerce platforms, where a buyer and seller need to be sure that the funds have been transferred and the goods have been delivered before the transaction is considered complete.
- Cryptocurrency exchanges and other financial institutions, where the ability to guarantee that a transaction will be completed in full is important for maintaining trust and security.
- Decentralized finance (DeFi) transactions on blockchain networks, where atomic swap can be used to exchange one cryptocurrency for another without the need for a trusted intermediary.
This page was last updated on January 12, 2023.