“Yahoo users will not be able to interact with Google Email (Gmail) users via Mail,” – Earth will stop if tomorrow’s headlines sound like this. This title would never come to light for all the right reasons. However, blockchain technology and its favorite son, decentralized finance (DeFi), are headed down this rabbit hole.
Silent blockchains with no window for external communication are dominating the nascent space. Interconnectivity is primary and synonymous with the primitive human quality of being social. Since the days of the barter system, transfer and exchange have been the two major practices on which the world is built.
Networking between Blockchain and the need for IBC
Currently, the blockchain applications and DeFi juggernaut are nothing but a bunch of solutions that fail to realize their true potential. To address this concern, the blockchain network needs to join hands with other networks and be open to a sovereign network of interconnected blockchains.
The Inter-Blockchain Communication (IBC) protocol will facilitate the handshake. It provides platform that can transfer data across different networks and facilitates cross-chain transfer of assets and tokens. And since IBC is a blockchain agnostic protocol, it has no native network and provides a fair solution to the whole world of blockchain solutions.
Major blockchains like bitcoin and ethereum are silent without a transport layer. This limits their capabilities. Imagine bitcoin being able to operate Ethereum-based smart contracts without permission. If this were the case, users would be able to embrace the limitless functionality of the world’s popular currency in Bitcoin (BTC), as well as Ethereum’s smart contract.
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Furthermore, Ethereum’s scalability concerns are proof of why the silent blockchain needs inter-blockchain communication. By making the network interoperable, transactions can be parallelized to avoid network congestion. Using IBC, Ethereum can quickly validate transactions with low gas fees, and attract more people to use the network and its applications.
Furthermore, blockchains looking for enterprise-level solutions require IBC and interoperability to cater to their customers at scale. By enabling cross-chain transactions, networks such as Ethereum and Bitcoin can enjoy institutional adoption. how? To date, these networks operate on the probabilistic conduct of transactions, that is, the finality of blocks. But with IBC, chain and peg-zone can be used to guarantee finality.
With blockchain technology aspires to improve the functioning of huge industries such as supply chain and healthcare, IBC injects a potion of credibility into the technology and its solutions.
Prior efforts to acquire IBC were jointly fragmented
Inter-blockchain communication and interoperability is not a new concept in the world of blockchain. Efforts to achieve them have been in talks for years and there are several projects working towards connecting different blockchain networks. But the projects supporting interconnectivity were themselves fragmented because their approaches, designs and use cases differed.
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Protocols such as Cosmos with its Tendermint Core, Polkadot and Chainlink have championed IBC and interoperability in their solutions. The emergence and adoption of these solutions is a major step towards an interoperable future.
Blockchain agnostic and Omnichain is the way forward
Going forward, exclusivity will be the biggest enemy of blockchain technology. In a time of decentralization and community-first approach, exclusive networks are walking a dangerous path. The protocol should adopt the IBC and provide solutions at scale.
In addition to integrating IBC, two weapons with which future protocols may equip themselves are blockchain agnostic and omnichain. This would remove the element of exclusivity and open them up to unlimited utilities across the network. It will also improve the feasibility and reliability of adoption of blockchain-based solutions for institutions, corporations, and even governments.
DeFi catalyzed the growth of the blockchain and crypto space in 2021. Interoperability and IBC are the ones to be seen in the future.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
The views, opinions and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Jared Moore He is the Director of Marketing at Sifchain, an all-chain solution for decentralized exchanges. Jared has extensive experience in the crypto space, especially with exchanges.