Since the introduction of blockchain technology to the world in 2008, we have seen a covering of quite an extensive journey. Furthermore, the creation of other cryptocurrencies creates an entirely new ecosystem. Blockchain promises the value of decentralization and freedom from the control of any individual or institution.
However, some restrictions exist between different blockchain networks, creating a limit for decentralization.
A blockchain bridge is an ideal solution for interoperability among different blockchain networks.
What is a Blockchain Bridge?
A Blockchain bridge is a tool that lets you transfer your assets from one Blockchain to another. Just as a physical bridge connects two physical locations, a blockchain bridge connects two blockchain ecosystems.
Blockchain bridges solve one of the main pain points within blockchains – a lack of interoperability. Bridges facilitate communication between blockchains through the transfer of information and assets.
Blockchain bridges are essential as they;
Enable the cross-chain transfer of assets and information
Allows dApps to access the strengths of different blockchains, which enhances their capabilities.
Helps users access new platforms and leverage the benefits of different chains.
Enables developers from different blockchain ecosystems to collaborate and build new platforms for the users.
Types of Blockchain Bridges
Trusted Bridges- Their governance is by a centralized operator or entity. They are deemed trusted bridges as the users have to trust the reputation of a centralized bridge and deposit their funds on the bridge.
Trustless Bridges- These bridges do not need central intermediaries or custodians. They leverage algorithms and smart contracts for their operations.
Unidirectional Bridges- These are bridges that only allow irreversible asset transfer from one network to another. These kinds of bridges are only suitable for one-way transactions.
Bidirectional Bridges- These bridges help ensure the seamless transfer of assets and information between two networks. Therefore, bidirectional bridges are a favorable alternative to using two different unidirectional bridges.
Use Cases of Blockchain Bridges
Lower transaction fee: You can bridge Eth from mainnet to L2 to enjoy lower transaction fees as you explore dApps.
Dapps on other blockchains: You can easily use dApps on different chains and enjoy better rewards.
Explore other blockchain ecosystems: You can bridge the assets to other blockchains to try out their native dApps.
Own native crypto assets: You can bridge your WBTC on ETH Mainnet to Native BTC on the bitcoin blockchain and vice versa.
Popular Blockchain bridges include the Binance bridge and Avalanche bridge. Others include Interlay, Snowfork chains, and Centrifuge.
Risks of Blockchain Bridges
Like web3, blockchain bridges are still in the early stages of development, and the best bridges are yet to be created. The risks with a blockchain bridge depend on the type and have a different impact on users and the blockchain community.
For example, trusted blockchain bridges present censorship concerns due to centralized control. A trustless bridge would also present risks in the form of malware or bug risks in the smart contract code.
Final Thoughts
Bridges are crucial to onboarding users onto Ethereum L2s and even for users who want to explore different ecosystems. An ecosystem of bridges connecting a blockchain allows for more coherence and interoperability, providing space for increased scalability.
However, given the risks involved in interacting with bridges, users must understand the trade-offs the bridges are making. Also, due to the frequent attacks on cross-chain bridges, the need for a more secure and resilient bridge design still stands as an ongoing exploration.
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