What is a Cross Chain Bridge

Cross-chain bridges are a way to fix one of the problems in the blockchain industry today, which is that different chains don’t work well together. Every so often, a new blockchain network pops up, and users have never been able to move their assets from one network to another. I had to go through middlemen to get what I wanted, which cost me time and money.

Cross-chain bridges make it possible to move tokens, smart contracts, and other data from one platform to another.

How Do Cross Chain Bridges Work?

According to statistics, today there are 115 first-level blockchains working in the blockchain space. In 2009, there was only one chain, which was Bitcoin. Since there was only one chain, there was no need to move data between different chains. But because of the way the market works now, bridges are in high demand.

Main advantages of using a cross chain bridge:

• They let you work in multiple DeFi protocols, so you aren’t limited to just one network.
• They offer a “compromise” between blockchains by combining the security, speed, and decentralization features of all of them.
• They make the blockchain space less scattered, which makes work in general more efficient for both users and decentralized applications.

Bridges make it easy for investors to move their assets to the blockchain, where the best places to make money are. So, there are a lot more ways to work with decentralized finance, and the user still has full control over his money when he uses platforms with less central control. Some bridges can even convert NFTs.

So, a cross-chain bridge is a way to connect two chains so that you can move tokens and other information between them. At the same time, chains can have completely different protocols and control models, and this won’t stop them from working together safely.

Principle of Cross Chain Bridge

From a technical point of view, the tokens do not move when an investor moves them from Blockchain A to Blockchain B using a decentralized bridge.

Instead, the tokens on blockchain A are temporarily locked, and on blockchain B, the same number of tokens are temporarily unlocked.

During the reverse exchange, tokens in blockchain A can be unlocked again, while tokens in blockchain B can be blocked.

So, the fact that data is being moved is more of an illusion than a real thing. But from the user’s point of view, it doesn’t matter.

Types of cross-chain bridges

First of all, there are two types of cross-chain bridges: centralized (trusted, needs trust) and decentralized (trustless, not requiring trust). The way they store assets that are locked and confirm transactions is different.

In a centralized system, validators who have already been chosen control deposits of tokens on the source chain, block them, and mint tokens on the target chain. Wrapped BTC is an example of this (WBTC).

In a decentralized system, anyone can become a validator, and for each transaction, validators are chosen at random to prevent manipulation. A relay creates cryptographic proofs of events and sends them to a smart contract on the target blockchain through this type of bridge. The point of this confirmation is to show that it is safe to mint tokens, since they already exist in the original chain.

Cross-chain bridges can also be sorted by the ratio of the number of chains to the number of tokens:

• One token, multiple networks. For example, WBTC: you can only move one cryptocurrency from one blockchain to another.
• Two networks and a lot of tokens. You can exchange one cryptocurrency for another between two blockchains. Rainbow Bridge lets you move money between Ethereum and NEAR. ZeroSwap lets you move money between Ethereum and BSC. Gravity lets you move money between Ethereum and Cosmos.
• One network, but a lot of tokens. Avalanche Bridge, Polkabridge, and Solana’s Wormhole are just a few examples.
• Lots of tokens, lots of networks. These kinds of solutions are often built into different kinds of decentralized applications to pull money from multiple blockchains. RenBridge, which can connect seven chains, is an example.

Lastly, some bridges can handle many tokens, but they are only used in one application because they are a kind of module or adapter. Multichain is an example of this.

Conclusion

Decentralization has always been one of the most important requirements for blockchain structures. This is even more important than scalability or other parameters. In the case of cross-chain bridges, developers are moving away from this philosophy and putting efficiency first. This could become very important to the growth of the DeFi ecosystem as a whole. These kinds of services already give projects a framework that lets them be as flexible and interoperable as possible, which leads to new and better applications for end users.