What are blockchain bridges?
A blockchain bridge allows seamless data and token transfer between different blockchain networks.
Blockchain networks are designed to create a self-sustaining ecosystem of applications and tokens. They have proliferated in recent years. But, they remain disconnected and cut off from each other due to their closed ecosystem. As a result, various networks emerge with their own communities and economies.
The system is effective. Yet, the disconnection contradicts the promise of decentralization. It limits blockchain technologies’ potential and growth by binding users to a single network when the field can provide many opportunities. Additionally, some assets kept on one blockchain can be incompatible with the other blockchains.
Several projects aim to solve these problems by constructing bridges to connect different networks.
What are blockchain bridges?
Blockchain bridges provide interoperability across different networks and sidechains. These bridges enable apps and users to use various blockchain functionalities without sacrificing any benefits.
Blockchain interoperability allows developers to construct DApps on the strengths of various networks. The bridges can also provide more liquidity to DeFi apps while establishing a network of services that communicate across communities.
Blockchain bridges have various applications:
- Allows a token created on one blockchain to be usable on another,
- Ease data exchange among different blockchains,
- Call smart contracts on another blockchain,
- Get real-world data from third-party services (aka oracles)
- Allow users to execute quick token transactions at cheap costs, and
- Allow DApp developers to run applications on many networks
How do blockchain bridges work?
The mint-and-burn protocol is the most used protocol for blockchain bridges.
When a user transfers a token from one blockchain, the protocol first burns the token from the host blockchain. Then, it mints an equal token on the receiving blockchain.
Blockchain bridges have two types:
- Centralized bridges
- Trustless bridges
Here’s how they work:
Federations or centralized authorities manage centralized bridges.
To use an app or service, users must establish trust with the third party. Federations offering bridging service establishes criteria when qualifying transaction validators. These federations also control the bridge.
A trustless bridge is decentralized. It runs automatically through smart contracts. These bridges function through a network of nodes, also known as agents. Unlike centralized bridges, anyone can become a contributor to this type of bridge.
Decentralized bridges operate via distributed participants to validate the transaction. In exchange, they get a reward. Validating transactions also ensures the integrity of the bridge system.
Interoperability is the future.
Blockchain teams are collaborating to bring a new reality of interconnected blockchain networks. Blockchain bridges offer a solution to transcend beyond the polarisation of the blockchains. It also encourages increased innovation, user acceptance, and technological impact.
To enable compatibility on as many chains as possible, we have built a decentralized bridge. Our cross-chain bridge allows $TBC holders to transfer their tokens from one chain to another. This bridge will assist our platform’s users in optimizing their cryptocurrency holdings.
Learn more about Terablock’s cross-chain bridge:
Whether you have a question about our products, features, or anything else, our team is ready to answer all your questions. Please feel free to get in touch with us on our Telegram Community Chat.
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