Definition
A Hashed Timelock Contract (HTLC) is a specialized smart contract mechanism that conditions the transfer of value on the revelation of a cryptographic preimage within a specified time window. It combines a hashlock, which requires knowledge of a secret corresponding to a hash, with a timelock, which enforces refundability or expiry after a preset block height or timestamp, enabling conditional, time-bound value transfers across or within ledgers.
In Simple Terms
A Hashed Timelock Contract is a type of smart contract that locks funds until either a secret value is revealed or a deadline passes. If the correct secret is provided before the deadline, the funds are released to one party; if the deadline passes first, the funds become claimable by another party or revert to the original owner.
Context and Usage
Hashed Timelock Contracts are discussed in the context of trust-minimized coordination between independent parties, especially where conditional payment and strict timing guarantees are required. They appear in designs for cross-ledger interactions, multi-hop payment channels, and contract-based coordination schemes that rely on deterministic conditions defined by hashes and time constraints, often interacting with broader smart contract architectures and external signaling components.