So far, trust is limiting the ability to send tokens between chains.
Designing bi-directional communications between networks is the main goal to achieve.
Making bitcoin (BTC) transactions possible on the Ethereum network is one of the goals that is keeping developers up at night. Although today there are some methods that facilitate this activity, it is still not possible for the pioneering cryptocurrency to interact with the smart contracts of other chains without exposing its security or losing its decentralization. A task that is still pending.
This was commented by James Prestwich, designer of cross-chain protocols, during his talk “Building bridges not walled gardens”, which was part of the first day of the Blockchain Summit Latam 2021 event
, held this Monday, September 6.
Prestwich commented that there is still a disconnect between blockchains, although today there are alternatives to use BTC in the different decentralized finance platforms (DeFi) and decentralized applications (DApp) that exist in Ethereum. One of them is WBTC or Wrapped BTC
, an ERC20 standard token that works as a bridge between both blockchains.
It means that with WBTC we have a bridge that allows us to use bitcoin on Ethereum, but we can also generalize that to say that we could go from Ethereum to Polygon, Avalanche, Solana or any of these other cool chains where things are happening. However, we should keep in mind that the fundamental thing that a bridge does is enable two-way communication, meaning that you can go back and forth from one chain to another.
James Prestwich, designer of cross-chain protocols. Beware
of walled gardens
Several alternatives that exist today to bring bitcoin into the Ethereum ecosystem are nothing more than walled gardens, Prestwich warned. He used that metaphor to refer to options that don’t yet offer all the decentralization that characterizes the ecosystem.
Prestwich noted that there are still no bridges that offer the opportunity for users to retain custody of their funds. Source: Screenshot/ Blockchain Summit Latam.
It is because WBTC, for example, comes from an initiative driven by centralized custody startup BitGo and, like other bridges, does not offer a bidirectional channel that communicates both chains.
This type of project has generated <a href=”https://www.criptonoticias.com/tecnologia/bitcoins-
tokenized-ethereum-generate-controversy-backup-methods/” target=”_blank” rel=”noopener”>controversy over their backing methods, as they require users to trust the honesty of the developers. Especially in the management of bitcoins
, as well as the processes used to adjust the ratio of anchored funds and collateral deposits.
From Prestwich’s perspective, the main problem that exists today is that there needs to be the ability to see and access information across chains that will be interoperable.
So far we have two unidirectional channels and duplex bridges are impossible. In reality, you can’t create a two-way channel. Not for communicating between blockchains. So we have to start by designing two-way communications because trust boundaries limit our ability to send messages between blockchains, and we have to figure out how to get around them.
James Prestwich, designer of cross-chain protocols.
The other problem Prestwich warns about is that users don’t possess private keys when they send tokens between chains, even though there are a lot of external actors participating in that cross-chain communication.
So, the key conclusion here is that chains are very passive. They can’t reach outside of themselves. So they need off-chain actors who are active, and therefore they need untrained actors to be scanning the state of the first chain for messages destined for the second chain. The problem is that off-chain actors can lie.
James Prestwich, cross-chain protocol designer. Prestwich showed the variety of bridges that exist to bring BTC to Ethereum. Source: Screenshot/Blockchain Summit Latam.
The best is yet to come for integrating blockchains
The developer adds that the bridges that exist to offer cross-chain interoperability are nothing more than “the first drafts of the advances that are yet to come, because the second generation of bridge technology will be coming out very soon.”
That’s why he believes the best is yet to come, in fact, he noted that much of the work he’s been doing with his team over the past two years is finally paying off.
“We’re starting to see a lot of things like the Rainbow Bridge that allows the transfer of any token, NFT or asset between the NEAR and Ethereum blockchains. We’re starting to like this more,” Prestwich said.
While the next generation of projects is coming, Prestwich says the bridges that exist so far offer a federation of trust where there is a multiple signature in control of the funds. It’s a method that allows one chain to be verifying the entire consensus process and all the other chain’s headers.
As the <a href=”https://www.criptono
ticias.com/finanzas/expertos-piensan-puentes-blockchains-expandir-camino-defi/” target=”_blank” rel=”noopener”>recently reported CryptoNews, other experts also consider that there is still a lot of work to be done in terms of interoperability between chains. To continue advancing, work is being done on a common protocol with the idea of being able to share information such as data and assets between the various public chains that exist. The barriers that these chains face are that they have different “languages” and cannot “communicate” with each other.