Public chain — Decoding Asset Cross-chain Bridge
A public chain or Blockchain is an ideal decentralized platform as it is accessible to everyone. Simply put, anyone can join this chain and write and read the information on the platform. The best part about public Blockchain is its flexibility for participants who only need internet, hardware, and electricity.
What are cross-chain bridges?
While discussing the modus operandi of public chains, the discussion on cross-chain bridges inevitably comes into play. Cross-chain bridges are the ones that enable an exchange or swapping of assets, including information, cryptocurrency, or NFTs, from one public chain to another.
Two chains can have different protocols, rules, and overall governance models. The cross-chain bridge is a two-layer relationship that makes it possible to transfer tokens or data interoperably. Let’s say you have Bitcoin but wish to spend it like Ethereum. In this case, you can turn to a cross-chain bridge for it, as it is a medium and the bridge that will allow you to spend Bitcoin in the Ethereum ecosystem.
Utilities of cross-chain bridges
Besides asset exchange or data swapping, cross-chain bridges are integral to other vital parameters. If one of the public chains is showcasing subpar performance, the cross-chain bridge can seamlessly help in transferring transactions from one layer to the off-chain system.
But there is an inherent weakness in such cross-chain bridges. Such circumstances demand a security model which has no liability or dependence on the Blockchain network of the main chain. There remains a certain degree of security risk that can’t be ignored.
In most ideal cross-chain bridges, transparency is critical, and security is guaranteed to some extent. Additionally, compatibility with protocols, transactions, and applications of other public chains with high performance are massive add-ons.
Categories of Cross-chain bridges
The cross-chain bridges can be classified into trust-based bridges and trust-less bridges.
These bridges require a central entity or federation of mediators to run. That is why these bridges are also called federation or custodial bridges. Here the users have to rely on the federation members to verify and confirm the transaction. Undoubtedly, these bridges are considered cost-effective for transferring a bulk amount of cryptocurrency. The members of the Federation are primarily incentivized, keeping the transactions quick and running smoothly.
These are decentralized bridges that rely on machine algorithms, aka the smart algorithms, for day-to-day operations. These are very similar to a real Blockchain where the individual networks play their parts in transaction validation. These are considered to be more flexible and secure.
Types of cross-chain bridges
Depending on the technology used, cross-chain communication can be categorized into isomorphic and heterogeneous interactions.
Here the chains operate in a simple format with a consistent security method with a consensus algorithm and network topology added with block creation verification logic.
Here the chains have different block compositions but come with a deterministic guarantee mechanism. Here third-party auxiliary services are needed for cross-chain interaction.
Speaking of popular Blockchain or cross-chain bridges, Binance Bridge, Portal by Wormhole, Wrap Protocol, and Avalanche Bridge are among the most popular ones.