Steemit Crypto Academy Contest / S5W1 - The Blockchain Bridge
Hello everyone, how are you doing ?, I welcome you once again to the steemit crypto academy, Here we are in week 1 of the steemit engagement challenge Season 5, and I shall be participating in the contest "The Blockchain Bridge", Happy Reading!!
Blockchain Bridge can be defined as the process which allows the interoperability of two blockchains, this is done in a way that data structured on two different blockchains can interact with each other, and order can as well be filled without having to convert the previous token to a new one.
Blockchain bridge is otherwise known as Cross-chain bridge, this means that with blockchain bridge, you can easily transfer a token of different blockchains to one another
There has been a different example of blockchain bridge in the past, for instance, in a case where a user who owns Bitcoin wants to transfer his assets to the Solana network, this could be done easily with the Bridge without the user having to convert or trade the bitcoin to Solana before interacting with the network, as the bridge as already allowed interoperability and data connection between the two networks, its a way of economizing gas fees on assets transferring.
Unsplash
Improve Functionality: - This is one large part of the benefit of blockchain bridges, and it mostly benefitted Defi users, which means a user can easily interact with other blockchains to process data communication. this allows users to make transfers of assets without having to go through converting the coin to another network before making a successful transaction, this as well makes communication easier and better between two networks.
Improved Network Scalability: - This is one of the blockchain trilemmas where many blockchains have problems with scalability due to large numbers of users waiting to perform transactions within a network, the blockchain bridge made it easier in a way that users don't necessarily need to convert their coin any longer since the two networks are interoperable, and transactions between blockchains are interoperable(Meaning can move from one blockchain to the other).
Economize gas fees: - Transferring from one token to another requires a large number of gas fees, but with blockchain bridges, user can then save up their transaction fee instead of burning it up on gas, and make the transaction through blockchain bridge, this will be very beneficial to users who commit lots of daily transaction on a separate network.
How does the bridge work?
Blockchain Bridge is simply easier, thou there is more technicality in its algorithm, but it works in a way that the Blockchain you are trying to operate with creates a Wrapped token of that asset and has their assets locked in the bridge, for instance, users trying to access the BTC value of ETH will have to consume the WBTC, which in this case their asset will be transferred in the equivalence of the right amount they are trying to transfer.
Most bridges are Unidirection which means they might not be able to receive assets from the other blockchain, but could only transfer assets out.
There are two types of blockchain bridges which are custodial and non-custodial, the differences is the operator required to carry out transactions in the network.
Custodial Bridges: - Also referred to as centralized bridges, this is the type of blockchain bridge that require users to trust the central operator to carry out the bridge transactions, the contracts agreement is being withheld by the central authority which means this thus require third party involvement, and these are mostly done on a centralized exchange as well.
Non-Custodial Bridge: - This is quite the opposite of the custodial bridge as it is decentralized, meaning there is no central operator required to monitor the bridge activity, but instead, it is being handled by a smart contract, which uses the Smart Contract agreement to automate transactions, this is found on the decentralized platform as well and requires no users identity before a transaction can be performed on the bridge.
Pick an example of a blockchain bridge in existence and explain how it works
The example of the blockchain bridge I will be referencing is the Multichain Blockchain bridge, The Multichain Bridge is the second largest blockchain bridge, it supports cross-chain bridges across several networks, which allows data communication between many networks.
The Multichain blockchain bridge supports interoperability within the various blockchains such as BNB Chain, Bitcoin, Blocknet, Boba Network, Celo, Clover, ColossusXT, Conflux eSpace, Cronos, Ethereum, Terra, etc, it is known as the Cross-chain bridges that support most blockchains with a Total Value Locked worth $2.27B.
There are a couple of risks involved in Blockchain Bridges, which with this could cause several thefts, especially in the custodial bridge.
Risk of Funds to hackers - Why there is an advantage of moving funds across networks, the risk of funds brings a limitation to blockchain bridges. as I had mentioned earlier, transactions are being withheld in the Wrapped token of the network which afterward, they will be processed to the network the user is getting to, during this process, there could be theft of funds which will be untraceable, and this could cause serious damage to a network.
Limits to Scaling: - The blockchain bridges are built to reduce scalability on the network whereby transactions could be processed through the bridge which thus reduces the Transaction volume of the network, but this could as well cause great effects around the bridge, as when more users are using the bridge, this could hinder the bridge network scalability, whereby there might now be a lower transaction rate in the bridge network.
Exposed - With the bridge connecting to multiple networks, this could as well be a weakness for the network, and this could cause exposure of blockchain securities to other networks, and through this, there could be several hacks as the network is interoperating with too many blockchains.
Future of Blockchain Bridges
With blockchain technology, there have been several coming effects working day by day in other to increase blockchain efficiency, the blockchain bridge is introduced to allow interoperation between networks, this is a great effect as this means users don't necessarily need to convert their assets before interacting to the other network anymore, I believe that most people would love this idea and the future seems bright for blockchain bridges.
Except for the fact that blockchain bridges are exposed to security threats whereby causing hacks on the network, but, when the security around the bridge gets better, I believe that people will prefer performing operations through the bridge network rather than converting to the network.
Here comes the conclusion on the topic "Blockchain Bridges" where I have explained Blockchain bridges as the interaction of data communication between one or more blockchains, there are custodial bridges which are centralized, and the operation are performed through the central operator, and as well there is a non-custodial bridge which operates through the Smart contracts agreement.
Blockchain bridges are very risky to work with, which is why it is better to make absolute research on the bridge network you are trying to access before making transactions with them.
Thank you everyone for coming, I hope to see a great deal of you next time.
Blockchain Bridge has improved efficient functionality and usability in the blockchain networks. We are hoping that greater adoption with come into the technology as more people are properly educated on how to bridge from one blockchain to another. Very Comprehensive Article.
Yes i agree , it will be nice to see great adoption of bridge in most blockchain
Let's be keeping the same rhythm of interaction we made last season because it was pretty good. Success for the entry. Regards from my beautiful Venezuela. Have a nice and happy weekend from my part. Cheers.
Thank You.
This is quite the first time I will be hearing about Multichain Blockchain bridge but it is interesting to read about it
The blockchain bridge was created to address the issus of lack of interoperability, scalability issues and many others.
That's very true, it has helped to reduce excessive gas fee. An example of that is the Arbitrum bridge where transactions are bundled to reduce individual gas fee on the Ethereum blockchain.