Merge pull request #3 from comit-network/readme

README.md

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+XMR to BTC Atomic Swap
+======================
+
+This repository is a proof of concept for atomically swapping XMR for BTC.
+
+We define:
+
+- Alice to be the actor that initially holds XMR.
+- Bob to be the actor that initially holds BTC.
+
+In the best-case scenario the protocol looks like this:
+
+1. Alice and Bob exchange a set of addresses, keys, zero-knowledge proofs and signatures.
+2. Bob publishes `Tx_lock`, locking up his bitcoin in a 2-of-2 multisig output owned by Alice and Bob.
+Given the information exchanged in step 1, Bob can refund his bitcoin if he waits until time `t_1` by using `Tx_cancel` and `Tx_refund`.
+If Bob doesn't refund after time `t_1`, Alice can punish Bob for being inactive by first publishing `Tx_cancel` and, after `t_2`, spending the output using `Tx_punish`.
+3. Alice sees that Bob has locked up the bitcoin, so she publishes `Tx_lock` on the Monero blockchain, locking up her monero in an output which can only be spent with a secret key owned by Alice (`s_a`) *and* a secret key owned by Bob (`s_b`).
+This means that neither of them can actually spend this output unless they learn the secret key of the other party.
+4. Bob sees that Alice has locked up the monero, so he now sends Alice a missing key bit of information which will allow Alice to redeem the bitcoin using `Tx_redeem`.
+5. Alice uses this information to spend the bitcoin to an address owned by her.
+When doing so she leaks her Monero secret key `s_a` to Bob through the magic of adaptor signatures.
+6. Bob sees Alice's `Tx_redeem` on Bitcoin, extracts Alice's secret key from it and combines it with his own to spend the monero to an address of his own.
+
+![BTC/XMR atomic swap protocol](https://github.com/comit-network/xmr-btc-swap/blob/readme/BTC_XMR_atomic_swap_protocol.svg)
+
+The repository is structured as a library and a single test function that executes the swap.
+The library has the following modules:
+
+- `alice`: Defines the state machine that describes the swap for Alice.
+This includes the messages sent to/from Alice.
+- `bob`: Defines the state machine that describes the swap for Bob.
+This includes the messages sent to/from Bob.
+- `bitcoin`: Keys, signing functions, transactions etc. for Bitcoin.
+Also includes a test wallet (see below).
+- `monero`: Keys, signing functions, transactions etc. for Monero.
+Also includes a test wallet (see below).
+
+Currently we have a single test function that proves the following:
+
+- Interaction with both block chains and their respective wallets works.
+- The messages required are correct and can manually drive the state transitions to execute a swap.
+- It is possible to interact with, and watch, the monero blockchain using `monero-wallet-rpc`.
+- It is possible to watch a bitcoind instance using `bitcoin-harness` (we already knew this :)
+
+Currently we do not do:
+
+- Actual network communication.
+- Verification that the UI is acceptable.
+Since we do everything in a single test function there is no user interaction, this is unrealistic for a real product.
+  
+
+## Testing
+
+We wrote a few additional libraries to facilitate testing:
+
+### Wallets
+
+- `bitcoin` module contains a test wallet by way of `bitcoind`.
+- `monero`: module contains a test wallet by way of `monero-wallet-rpc`.
+  
+### Blockchain harnesses
+
+We have written two harnesses for interacting with bitcoin and monero.
+
+- [bitcoin-harness](https://github.com/coblox/bitcoin-harness-rs)
+- [monero-harness](https://github.com/comit-network/xmr-btc-swap/tree/master/monero-harness)
+
+These harnesses wrap interaction with `bitcoind` and `monerod`/`monero-wallet-rpc`.
+
+We use [testcontainers-rs](https://github.com/testcontainers/testcontainers-rs) to spin up `bitcoind`, `monerod`, and `monero-wallet-rpc` in docker containers during unit/integration testing.
+