The Role of Blockchain Bridges in Enhancing Interoperability and Scalability

A blockchain bridge typically consists of two main components: a bridge contract that is deployed on both networks and manages the exchange of information, and a bridge client that connects the two networks and facilitates the transfer of data or assets.

Trustless Bridge

While commonly referred to as a bridge, a trustless bridge relies on a smart contract that is deployed on both networks. It defines the rules for how the two networks can interact and exchange information, such as the types of data or assets that can be transferred, and the conditions under which the transfer can take place.

The bridge client is a software application that is installed on nodes on both networks. It connects the two networks and allows them to communicate with each other. The bridge client uses the bridge contract to verify and validate the information that is being transferred between the two networks, ensuring that the transfer is valid and complies with the rules defined in the contract.

Since they are trustless, the bridges are adopting the security of the underlying blockchain. At the same time, users remain in control of their assets with no involvement from the third party or any central authority.

Trusted Bridge

Unlike trustless bridge, a trusted blockchain bridge is a system that allows different blockchain networks to communicate and exchange data with each other, but relies on a trusted third party to facilitate the process.

The main benefit of a trusted bridge is that it can be easier to set up and operate than a trustless bridge, as it does not require the use of complex smart contracts. However, it also means that users must put their trust in a third party to properly handle the transfer of assets, which may not be suitable for all users or situations.

Despite being less decentralized, this bridge may onboard more users who are used to traditional finance.

The Role of Bridges

Blockchain bridges are needed because different blockchains operate in isolated environments and have different rules and consensus mechanisms. This means they cannot natively communicate or exchange assets with each other. Blockchain interoperability, including between main and side chains, allows users to take advantage of the strengths of each blockchain without sacrificing the benefits of the host chain. This has several practical applications, such as:

  • Using blockchain bridges to transfer valuable digital assets from a blockchain with high value but few decentralized apps (e.g. Bitcoin) to a blockchain with a developed decentralized finance ecosystem (e.g. Ethereum) and a need for extra liquidity.

  • High-volume blockchain bridges enable greater scalability without requiring developers and users to give up the liquidity and network effect of the original chains. This is especially important as Ethereum continues to experience congestion issues prior to the full implementation of Ethereum 2.0.

  • Blockchain bridges enable users to make and receive small transactions quickly and without high transaction fees, improving the user experience for gaming and ecommerce.

If you are looking for a list of bridges to use, do visit Blockscan bridges page to see which network these bridges support.

Ethereum smart contract that shows the transactions and ETH bridged over to Arbitrum
  • Faiz Adnan