“Yahoo users will not be able to interact with Google email (Gmail) users via mail,”-If tomorrow’s headlines sound like this, the planet will stop working. For all the right reasons, this title will never be seen.However, blockchain technology and Its favorite son, Decentralized Finance (DeFi), Is heading toward this rabbit hole.
Isolated blockchains without external communication windows are dominating the nascent space. Interconnectivity is fundamental and synonymous with the qualities of human primitive society. Since the era of the barter system, transfer and exchange have always been the two core practices for constructing the world.
The network between blockchains and the demand for IBC
Currently, blockchain applications and DeFi giants are just a set of solutions that have failed to realize their true potential. In order to solve this problem, the blockchain network needs to shake hands with other networks and be open to the sovereign network of interconnected blockchains.
The Inter-Blockchain Communication (IBC) protocol will facilitate this kind of handshake. It establishes a platform that can transmit data across networks, and promotes the cross-chain transfer of assets and tokens. Since IBC is a blockchain agnostic protocol, it has no local network and provides a fair solution for the entire blockchain solution.
The main blockchains, such as Bitcoin and Ethereum, are isolated and have no transport layer. This limits their capabilities. Imagine that Bitcoin can power Ethereum-based smart contracts in a permissionless manner. If so, users will be able to accept the unlimited functions of Ethereum smart contracts and the world’s popular currency in Bitcoin (Bitcoin).
In addition, Ethereum’s scalability issues prove why isolated blockchains require inter-blockchain communication. By making the network interoperable, transactions can be parallelized to avoid network congestion. Using IBC, Ethereum can quickly verify transactions with less gas fees, attracting more people to use the network and its applications.
In addition, the blockchain seeking to become an enterprise-level solution requires IBC and interoperability to meet the large-scale needs of its customers. By enabling cross-chain transactions, networks such as Ethereum and Bitcoin can enjoy institutional adoption. how? So far, these networks have focused on the probabilistic behavior of transactions, that is, the finality of blocks. But for IBC, chain and hook area can be used to ensure finality.
As blockchain technology is eager to change the operation of huge industries such as supply chains and healthcare, IBC has injected reliability into the technology and its solutions.
Previous efforts to achieve IBC have been scattered
Communication and interoperability between blockchains are not new concepts in the blockchain world. Efforts to realize them have been in negotiations for many years, and there are multiple projects dedicated to connecting different blockchain networks. However, due to differences in methods, designs, and use cases, the projects that support interconnection are themselves fragmented.
Protocols like Cosmos and its Tendermint core, Polkadot and Chainlink support IBC and interoperability in their solutions. The emergence and adoption of these solutions is a big step towards an interoperable future.
Blockchain agnosticism and the whole chain are the way forward
Looking to the future, exclusivity will become the biggest enemy of blockchain technology. In an era of decentralization and community priority, proprietary networks have embarked on a dangerous path. The agreement must include IBC and provide a large-scale solution.
In addition to integrating IBC, the two weapons that future protocols can equip themselves with are blockchain agnosticism and full chain. This will eliminate exclusive elements and open them to unlimited utilities across the network. It will also improve the feasibility and reliability of blockchain-based solutions adopted by institutions, enterprises and even governments.
The DeFi giant catalyzed the growth of the blockchain and crypto space in 2021. Interoperability and IBC are things that need attention in the future.
This article does not contain investment advice or recommendations. Every investment and trading action involves risks, and readers should research on their own when making a decision.
The views, thoughts, and opinions expressed here are only those of the author, and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Jared Moore He is the marketing director of Sifchain, which is a full-chain solution for decentralized transactions. Jared has extensive experience in the crypto field, especially in exchanges.