"Yahoo users will not be able to interact by mail with Google email (Gmail) users." If tomorrow's headlines sounded like this, the earth would stand still. This headline will never see the light of day for all the right reasons. However, blockchain technology and his favorite son, decentralized finance (DeFi), they are heading towards this rabbit hole.
Blockchains in silos with no window for external communication are dominating the nascent space. Interconnectivity is elementary and synonymous with the primitive human quality of being social. Since the days of the barter system, transfer and exchange have been the two fundamental practices on which the world has been built.
Networking between blockchains and the need for IBC
Currently, blockchain applications and the giant DeFi are nothing more than a balkanized group of solutions that fail to reach their true potential. To resolve this concern, blockchain networks must shake hands with other networks and be open to a sovereign network of interconnected blockchains.
The Inter-Blockchain Communication (IBC) protocol will facilitate this handshake. It establishes the platform that can transfer data through different networks and facilitates the transfer between chains of assets and tokens. And since IBC is a protocol independent of blockchain, it does not have a native network and offers an unbiased solution for the whole world of blockchain solutions.
Major blockchains, like Bitcoin and Ethereum, are stored in silos without a transport layer. This limits its capabilities. Imagine that Bitcoin can power Ethereum-based smart contracts without permission. Had this been the case, users would have been able to embrace the unlimited functionality of Ethereum's smart contract alongside the world's popular currency in Bitcoin (BTC).
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Furthermore, Ethereum's scalability concerns are a testament to why siled blockchains need cross-blockchain communication. By making networks interoperable, transactions can be parallelized to avoid network congestion. With IBC, Ethereum can quickly validate transactions with lower gas fees, attracting more people to use the network and its applications.
Additionally, blockchains seeking to be enterprise-grade solutions need IBC and interoperability to serve their customers at scale. By enabling cross-chain transactions, networks like Ethereum and Bitcoin can enjoy institutional adoption. How? To date, these networks work on the probabilistic conduction of transactions, that is, the purpose of the blocks. But with IBC, chains and pin zones can be used to guarantee the purpose.
With blockchain technology eager to revamp large industries like supply chain and healthcare, IBC injects a potion of reliability into the technology and its solutions.
Previous efforts to achieve the IBC were fragmented together
Communication between blockchains and interoperability are not new concepts in the world of blockchains. Efforts to achieve them have been in talks for years and there have been multiple projects working to connect different blockchain networks. But the projects advocating interconnectivity were themselves fragmented, as their approaches, designs, and use cases differed.
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Protocols like Cosmos with its core Tendermint, Polkadot and Chainlink have championed IBC and interoperability in their solutions. The emergence and adoption of these solutions is a giant step towards an interoperable future.
Blockchain agnostic and omnichannel is the way to go
In the future, exclusivity will be the biggest enemy of blockchain technology. In times of decentralization and community-based approaches, exclusive networks travel a dangerous path. The protocols must adopt IBC and provide solutions at scale.
In addition to integrating IBC, two weapons that future protocols can be equipped with are blockchain agnostic and omnichain. This would remove the element of exclusivity and open them up to unlimited public services over the networks. It would also improve the viability and reliability for institutions, corporations, and perhaps even governments to adopt blockchain-based solutions.
The giant DeFi catalyzed the growth of the blockchain and crypto space in 2021. Interoperability and IBC are the ones to consider going forward.
This article does not contain investment advice or recommendations. Every trade and investment move involves risk, and readers should do their own research when making a decision.
The views, thoughts and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Jared moore is the Marketing Director of Sifchain, the omnichannel solution for decentralized exchanges. Jared has extensive experience in the crypto space, especially with exchanges.
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