Blockchain Bridges: Its Meaning, Working And Types

A blockchain bridge, also called a cross-chain bridge, connects two blockchains and lets users send cryptocurrency from one chain to the other. Basically, you can use the bridge if you have Bitcoin but want to spend it like Ethereum.

One of the worst things about blockchain was that people couldn't work together. Even though each blockchain works well as a single unit, it is limited by the walls of its own domain. Most of the time, this can lead to high costs and traffic.

Blockchain bridges solve this problem by letting two separate platforms send and receive tokens, smart contracts, data, and other feedback and instructions.

These blockchains make different coins and follow different rules. The bridge is a neutral area where users can switch easily between the two. Most of us have a much better crypto experience when we can use the same network to access multiple blockchains.

This idea is a lot like Layer 2 solutions, but the two systems are used for different things. Layer 2 is built on top of a blockchain that is already there, so it does speed things up, but they still can't work with each other. Cross-chain bridges are also separate things that are not part of any Blockchain Development Services.

Let’s explore how Blockchain Bridges work!

Blockchain bridges can do a lot of cool things, like convert smart contracts and send data, but token transfer is the most common use. Bitcoin and Ethereum, two of the biggest cryptocurrency networks, have rules and protocols that are very different from each other. Users of bitcoin can move their coins to Ethereum and do things with them that they couldn't do on the bitcoin blockchain without a blockchain bridge. This can include buying different Ethereum tokens or making payments with low fees.

When you have bitcoin and want to move some of it to Ethereum, the blockchain bridge will hold your coin and make ETH equivalents for you to use. None of the crypto in question actually moves. Instead, the amount of BTC you want to send is locked in a smart contract, and you get the same amount of ETH. When you want to go back to BTC, the ETH you had or what's left of it will be burned, and an equal amount of BTC will go back to your wallet.

If you did this often, you would have to use a trading platform to change bitcoin to ETH, withdraw it to a wallet, and then deposit it on another exchange. By the time it gets there, you'll have spent more money on it than you probably had planned.

Also Read Here: Blockchain White Paper: Its Meaning And Basic Components

Think about how you can use your Visa card to pay your MasterCard bills or how PayPal can be used to pay for all your online purchases, no matter where you buy from. Even though there are many different systems and protocols, transactions are quick and easy. This is because the financial system has always been held together by interoperability, long before cryptocurrency was a thing. Cross-chain bridges are a big step toward normalizing blockchain technology, which is becoming more popular and not just for cryptocurrencies.

Trust-Based vs Trustless Blockchain Bridges

Centralization is an unspoken problem with blockchain bridges. If a user wants to trade their coins for another cryptocurrency, they have to give up control of them. This means that they are putting their money in the hands of someone else. If you have ever seen a wrapped token like wBTC, this is how it was made. In this case, the idea is that they will take your BTC and "wrap" it in an ERC-20 contract, making it work like an Ethereum token.

When you want to move a lot of crypto, trust-based bridges are a fast and cheap way to do it, but there aren't that many services you can trust. Going into the territory of brands that aren't as well-known can be risky, which makes it less appealing to smaller traders.

Decentralized blockchain bridges, also called "trustless bridges," are meant to make users feel safer when sending or receiving coins. These solutions work the same way a real blockchain does, with each network helping to verify transactions. Using a trustless bridge will give you peace of mind if you're worried about your coins getting into the wrong hands. The problem with decentralised bridges is that the service is done by independent contractors. When problems happen, that can be a problem because they are only paid to process your request, not to fix it.

How to Choose a Blockchain Bridge?

Here are some of the most talked-about blockchain bridges you can use to move crypto.

The Binance Bridge

This decentralised bridge has one of the widest ranges of cryptocurrencies that can be traded. It works with Ethereum, Solana, TRON, and other popular blockchains.

cBridge

If you don't want to use Binance's main bridge, you can go straight to this solution. You can interact with different blockchains and cryptocurrencies in the same way that you can interact with any trustless bridge. You might not like that you have to connect a wallet before you can do anything with cBridge.

AnySwap

This platform is well-known because it can do more than just transfer crypto. Once you're linked to a wallet, you can see how much of each type of coin you have. You can also move money from one account to another without any fees. But there are some blockchains where you can only go to one place if you want to transfer from there.

Wrap Up

Blockchain has always been defined by how decentralised it is, which also makes it more important than other ways to improve operations, like making it easier to scale.

Developers are naturally hesitant to make big changes, so they don't stray from the decentralised philosophy. Blockchain bridges show that they are moving beyond that idea. We may be taking small steps toward an innovative and normalized crypto economy, but any progress is better than staying with what already exists.