CRYPTO

Really decentralized money will be outside the sealed blockchain

“Yahoo users will not be able to communicate with Google Email (Gmail) users by mail,” – if tomorrow’s headline sounds like this, the world will come to a standstill. This title will never see the light for all the right reasons. However, Blockchain Tech and its favorite son, Decentralized Finance (DFI), are heading for this rabbit hole.

Sealed blockchains without any windows for external communication are affecting the newborn space. Interconnection is synonymous with the primitive human quality of being primitive and social. From the days of the barter system, transfer and exchange were the two main habits on which the world was built.

The need for networking and IBC within the blockchain

Currently, blockchain applications and DFI Jagarnot are nothing more than a balkanized group of solutions that fail to realize their true potential. To address this concern, blockchain networks need to work hand-in-hand with other networks and remain open to a sovereign network of interconnected blockchains.

The Inter-Blockchain Communication (IBC) protocol will facilitate this handshake. It sets up platforms that can transfer data across different networks and facilitate cross-chain transfer of assets and tokens. And since IBC is a blockchain agnostic protocol, it has no native network and blockchain solutions provide a neutral solution to the whole world.

Major blockchains like Bitcoin and Ethereum are sealed without a transport layer. This limits their power. Imagine Bitcoin being able to empower Ethereum-based smart deals without permission. If that were the case, users would be able to take advantage of the unlimited effectiveness of the world’s most popular currency, Bitcoin (BTC), as well as Ethereum’s smart contract.

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Also, the scalability concerns of Etherium is a proof of why sealed blockchains need inter-blockchain communication. By inter-operating networks, transactions can be paralleled to avoid network congestion. Using IBC, Ethereum can verify transactions faster with lower gas fees, attracting more people to use the network and its applications.

In addition, blockchains seeking to be an enterprise-level solution require IBC and inter-operability to meet their clients’ scale. By enabling cross-chain transactions, networks like Ethereum and Bitcoin can enjoy institutional acceptance. How? To this day, these networks deal with the potential behavior of the transaction, i.e. the finalization of the block. But with IBC, chains and peg-zones can be used to guarantee finality.

Blockchain technology is keen to reinvent the work of huge industries such as supply chains and healthcare, making an intrusion of reliability between IBC technology and its solutions.

Previous attempts to achieve IBC were fragmented united

Inter-blockchain communication and inter-operability Blockchain is not a fancy concept in the world. Efforts to achieve these have been under discussion for many years and multiple projects are working to connect different blockchain networks. But the projects that became champions in interconnection were themselves fragmented due to differences in their approach, design and use.

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Protocols such as Cosmos, its tendermind core, Polcadot and Channellink have championed IBC and inter-operability in their solutions. The emergence and adoption of these solutions is a huge step towards an inter-operative future.

Blockchain is agnostic and omnichain is the way forward

Going forward, monopolies will be the biggest enemy of blockchain technology. In times of decentralization and community-first approach, exclusive networks go down dangerous paths. Protocols must adopt IBC and provide solutions on a scale.

In addition to integrating IBC, the two weapons with which future protocols can equip themselves are blockchain agnostic and universal. This will remove the monopoly element and expose them to unlimited utilities across the network. This will improve the feasibility and reliability of adopting blockchain based solutions for organizations, corporations and even governments.

DFI Jagarnot has catalyzed the growth of blockchain and crypto space in 2021. We need to look at interoperability and IBC in the future.

This article does not cite its references or sources. Each investment and trading move involves risk and readers should conduct their own research when making decisions.

The opinions, thoughts and opinions expressed herein are those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Jared Moore Director of Marketing at Sifchain, a universal solution for decentralized exchanges. Jared has extensive experience in crypto space, especially with exchanges.