How Is Inter-blockchain Communication and Interoperability Achieved?

The establishment of inter-blockchain communication and interoperability will enhance transaction finality.

Introduction to Inter-blockchain Communication

The evolution of communication has a historically face-to-face verbal foundation (orality), which later transformed into unidirectional mass broadcasting communication, where information is transmitted from a single source. However, these evolutionary processes keep evolving and transforming into bidirectional and multidirectional interactive computer-mediated communication.

Consequently, the continual transformation of the communication life cycle has reached a new phase and is now transitioning into decentralized and distributed peer-2-peer blockchain communication.

This new iteration is proportional to technological advancement and the transition from less interactive traditional communication (print media, Film, radio, and Television) to the web1.0, web2.0, and now web3 era of the internet, that is currently infiltrating the mainstream.

Thus, the transferring process of arbitrary data packets and the interoperability relay of information from one point to another is being replicated in a more decentralized manner on the blockchain ecosystem through inter-blockchain communication.

Beforehand, blockchain protocols were unable to communicate together. For the first time in the evolution of the blockchain, due to the constant development and relentlessness of developers, we are approaching a new age of inter-blockchain communication.

Enough of the unnecessary chit-chat; let’s focus on the blockchain heuristic interactive mode of communication by exploring the concept of interoperability and inter-blockchain communication (IBC).

Understanding Inter-blockchain Communication and Interoperability Protocols

The consensus blockchain protocols and distributed ledger technologies have endured numerous criticisms due to their inability to relay information and communicate with one another seamlessly; this had led to the implementation of emerging architecture and computational development from the protocol and application layers of the blockchain.

However, blockchain protocols are still facing substantial challenges in terms of interoperable communication between protocols built on different architectures.

Thus, the evolutional trajectory of consensus blockchain has shown some progress in cross-border connectivity that increases mass adoption and transaction volume. The widespread and the adoption of distributed ledger technology has reduced cross-border transaction costs and connected people around the world without any geographical restriction.

What Is Blockchain Interoperability?

The interoperability of the consensus blockchain is the ability for different protocols to exchange unique digital assets and leverage data packets between one another interchangeably. In the early development stages of blockchain, interoperability was practically impossible; however, with the advancement of technologies, and the relentless efforts by developers, this is becoming possible.

How Can Blockchain Protocols and Applications Interoperate?

Due to the diverse nature of the blockchain ecosystem, sovereign blockchains operate autonomously, which has reduced interchain transactions and cross-chain data transfers. The implementation of interoperability between blockchains enables a wide range of blockchain services and increases interchain transaction finality. The blockchain protocols and applications can interoperate in various ways, and below is a list of possible ways that blockchains are interacting with each other.

Sidechains: Layer 2 and other sidechain protocols enable interaction through smart contracts with the base layer or the layer 1 protocols

Oracles: Decentralized oracles such as “Chainlink” and “API3” bridge the data and information gap between on-chain and off-chain environments. Oracles use on-chain smart contracts to interact with off-chain data

Bridges and swaps: Cross-chain bridges enable digital assets to be locked in one chain, while a synthetic identical asset is that asset is “minted” on another chain and sent to an address owned by the original owner

What Are the Benefits of Blockchain Interoperability?

o Customizable Web3 services: The ability for blockchain protocols and applications layers to connect different modules of communication is key to creating new Web3 architecture and platforms that aren’t easily available with legacy industries and the web2.0 era business logic

o A more decentralized ecosystem: The ability to establish interconnection between multiple blockchains to perform collective decentralization transactions

o Enhanced cross-industry collaboration: The ability to enforce data transparency and verifiability, smart contract execution, and decentralized consensus mechanisms between blockchains will enhance industrial performance

What is Inter-blockchain Communication (IBC)?

The Inter-Blockchain Communication protocol (IBC) allows homogeneous blockchains with compatible chains to talk to each other and relay arbitrary data between independently distributed ledgers and arbitrary state machines. In simple terms, inter-blockchain communication allows interchain communication between protocols.

The inter-blockchain communication (IBC) protocol consists of two layers, the transport, authorization, organization layer (TAO), and the inter-blockchain communication (IBC) application layer.

The transport layers (TAO) provide the required infrastructure and architecture to establish secure connections and authenticate inter- chains data packets, while, the application layer, defines the exact structure of the data packets and how the packets will be interpreted by the sending and receiving chains.

The IBC Application Layers

“The IBC application layer can be used to build a wide range of cross-chain applications, including but not limited to token transfers, interchain accounts (delegate calls between two chains), non-fungible token transfers and oracle data feeds.”

How can inter-blockchain communication be achieved?

Standardize IBC is achieved through heterogeneous protocols with homogeneous compatibilities such as Cosmos SDK and EVM to communicate directly with each other through secure connections and information packets authentication.

IBC enables the establishment of communication between homogeneous protocols and sovereign interchain protocols.

Thus, an interchain account allows secure cross-chain account maintenance.

“Interchain accounts allow a blockchain to securely control an account on another blockchain using IBC.”

What are the use cases and benefits of inter-blockchain communication (IBC)?

IBC often referred to as TCP/IP for blockchains provides a trustless environment that allows seamless transfer of information packets between protocols. IBC provides an endless stream of benefits that include the transfer and exchange of digital value

o Asset Transfer: The ability to transfer a digital asset such as (fungible tokens, non-fungible tokens, vanilla & shielded payments) from one blockchain to another

o Multichain Contracts: The cross-functional calls of multiple inter-chain and cross-chain contracts (cross-chain contract calls, cross-chain fee payments, interchain collateralization)

o Sharding: The partitions and fragmentation of blockchain networks into smaller shards to independently store information (code migration, data migration)

Blockchain Protocols and applications enabling inter-Blockchain communication (IBC)

Cosmos SDK (Cosmos Hub) and Polkadot substrate framework (DotSama) enable inter-blockchain communication.

Cosmos Hub is a shared distributed ledger that allows the inter-chain transfer of tokens. For a chain to connect to the Cosmos Hub, the said chain is required to satisfy certain requirements regarding transaction throughput and finality, although some chain that doesn’t satisfy the requirement can still be connected using a “bridge”.

Conclusion: Blockchain Interoperability

Blockchain interoperability through inter-blockchain communication provides tremendous opportunities for the blockchain ecosystem and its applications to communicate seamlessly with one another. Thus, increasing transaction finality and providing cross-chain information transfer.

Blockchain interoperability is one area in the consensus blockchain development phase that has received a lot of attention due to the inability of independent blockchain protocols to interact directly with another protocol. However, the latest development by Cosmos and Polkadot ecosystem means consensus blockchain is a step closer to achieving true interoperability that will enable seamless transaction finality.

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