Hash Time Lock Contracts (HTLC) are mechanisms used to facilitate secure transactions, particularly in multi-signature wallets or atomic swaps. They ensure that both parties in a transaction can execute a deal without requiring full trust in one another.The concept involves two main elements: a hash and a time constraint. A party creates a transaction and generates a hash of a secret code. This transaction is then shared with the other party, but the secret code is not disclosed. To claim the funds, the second party must reveal the secret code, proving they are legitimate participants.If the secret isn’t revealed within a specified time frame, the funds automatically revert to the original party. This time lock prevents either party from being able to steal funds or back out of the deal without consequences. HTLCs promote trust and security in transactions, allowing for seamless exchanges and reducing the risk generally associated with peer-to-peer trading. They are a crucial component in enabling decentralized finance and improving interoperability between different blockchain networks.