A quick overview of IBC & the “Internet of Blockchains”
Introduction
As the reliance of systems on blockchain-based technologies increases the requirement for reciprocity among these systems emerges. To solve this problem that had troubled the “Internet of Blockchains” emerged a protocol called the Inter-Blockchain-Communication protocol.
In this article, you’ll learn about the mechanisms that blockchains use to communicate with each other & about the IBC protocol which has managed 2.5 Million Cross-Chain transactions & a trading volume surpassing $600 Million across 40 chains just in the last 30 days.
Internet of Blockchains
The Internet of Blockchains is a network of inter-connected blockchains that communicate with each other to support cross-chain asset transfers, multi-chain smart contracts & other scalability use cases in general.
Application Specific Blockchains
Blockchains can be vaguely categorised into 3 different program-ability levels. Bitcoin is a simple distributed ledger system, with the ability to send & receive payments, it can be rated at the lowest level of program-ability. Ethereum on the other hand is a distributed state-machine, allowing users to program DApps via smart contracts, which is great… unless you want these DApps to want to communicate with other chains.
Application Specific Blockchains one-up Ethereum by providing much more sovereignty to the programmer. Instead of building a DApp on Ethereum, developers can build their blockchain from the ground up. Such blockchains can be easily built with the Cosmos SDK and are the main actors in the “Internet of Blockchains”.
Cosmos SDK
The Cosmos SDK is an open-source framework for building multi-asset public Proof-of-Stake (PoS) & permission Proof-of-Authority (PoA) blockchains.
Cosmos SDK has a modular design that allows developers to use pre-built modules for common functionalities such as asset management, governance, and authentication to name a few. Developers can then build custom applications on top of this, to allow for faster development & better security.
Blockchains including Cosmos Hub, Osmosis, Juno, IRIS Hub, Axelar, Kava & many more are built using the Cosmos-SDK.
️Inter Blockchain Communication
The Inter-Blockchain Communication Protocol (IBC) is a protocol to handle the authentication and transport of data between two blockchains. Unlike other bridging solutions like Arbitrum, IBC is permissionless and agnostic. It relies on the security and proofing mechanism provided by the communicating chains themselves. This method supports increased decentralization, and scalability and is much more independent.
Relayers
Relayers enable IBC’s trust-less & permission-less system. A Relayer is a third-party service that as the name suggests, relays events, messages & proofs from one chain to another.
Whenever a client of Chain A wishes to send an asset or any other data packet to ChainB , it will perform a local transaction on a “specified path” in its chain. After committing the transaction on its Chain A will emit an event announcing the transaction and the proof of the transaction.
A Relayer pre-configured to catch events that are emitted on the “specified path” will catch the event and relay that packet to ChainB. ChainB will then extract the relevant data from the packet, verify the proof of commitment and commit the transaction on its side.
It's important to note here that relayers don’t change the data packets they relay. The integrity of the data packets is maintained via the proof that’s generated when the sender chain commits the transaction on its side.
This was a general overview of IBC & an ICS-20 transfer , but there’s alot more that goes on under the hood. Stay tuned for Part 2 where I’ll be going into detail about the internals of the protocol.