So first let me point you towards the Borderless Webinar that would be helpful in your understanding of how Borderless functions.
As to your questions;
How is the ETH/BTC moved from one persons wallet to the others? Does this have to be done manually?
I would start to watch the Webinar at the 07:20 mark as this is when Arjun gets into this.
When you take or make an order from the order book, the order is “Matched”. Once the order is matched the trader has a set time in which to “Sign trade”. This signing of the trade is automated sending of the transaction through the Borderless platform.
From my discussions with Arjun: “The Borderless interface will have a nice interface to easily sign and send transactions (basically you will just decrypt your private key locally and the transaction will be signed and send). Users can choose for this to be automatic as orders are matched or they can do it manually.”
Once you have sent your transaction, the counterparty also has a set time to send the transaction. If either party fails to go through with the trade the NRG they used as collateral will be forfeit.
Does the BC wallet of each chain act as a smart wallet that does the transaction for you?
No it doesn’t. The Borderless platform simply acts as the means to push the transaction. The rovers pick the transaction up and send it to the miners. My belief is that once that transaction is mined, the opposing party knows immutably the state of the other chain, that the trade has been successful. In my mind it’s about proving the state of chains to the traders.
Hopefully that clears things up for you. @multichain can correct me if said anything wrong.