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Cross Chain in Blockchain, 4 Questions About This

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The future of blockchain lies in interoperability. This is also called cross-chaining. This means that two different blockchains can communicate with each other. This feature allows the crypto space to move around.

As cross-chaining between two or more blockchains becomes easier, the blockchain space expands. Now let’s see how this works.

What is cross-chain in blockchain?

Each blockchain uses its own language. Also, they are all coded differently. In other words, they cannot speak to each other. But we have to talk to each other. There are many reasons for that. For example, the transfer of digital assets between chains. Either NFTs, coins, or other information.

Crosschain makes this possible. They make different blockchains interoperable. As a result, you, as a user, have easy access to all these different protocols. In this cross-chain, the blockchain uses a bridge. That’s the weak point now. Unfortunately, there are regular hacks on the bridge. This is something the crypto community or developers need to work on.

Meanwhile, earlier this year, we had GeckoCon 2022. This was an online crypto conference. There were many different discussions. One of them was about the future of interoperability. The panel thought that this future would integrate seamlessly. We users don’t even know which blockchain we are on, along with the developers. You will come back to places where gas costs less and volumes are higher.Read our dedicated article about This GeckoCon discussionIn the photo below you can see a map of the Cosmos Zone.

cross chain

sauce: Cosmos map of the zone

What is cross-chain DeFi?

DeFi There are many exciting options to offer. For example, liquid staking, lending, borrowing, etc. Interoperability will prove to be very important for the DeFi space. This interoperability is required to compete with CEX. CEX is convenient, but it has a centralized setup. You cannot manage your own assets. DeFi, on the other hand, is all non-custody.

Current DeFi protocols that support cross-chain include:

  • Polka dot — Parachains and bridges to other networks such as Ethereum.
  • shortly — Rainbow Bridge between Near and Ethereum.
  • avalanche — There are many interoperable solutions in their ecosystem.
  • Cardano — There are many interoperable cross-chain solutions in their ecosystem.
  • XDC — Interoperable smart contracts. These can be run by dApps on other blockchains.

The diagram below shows how cross-chain works across DeFi platforms.

cross chain

sauce: spare hertz

How does the cross-chain bridge work?

Cross-chain bridges allow digital assets to be moved between different blockchains. These bridges are typically decentralized. They are dApps. The bridge works with smart contracts. So on the source side the token is burned or locked. Another smart contract waits on the destination chain. This will unlock the token or create a new one.

So tokens don’t actually move between blockchains. For example, let’s say you want to use Bitcoin in the Ethereum ecosystem. What happens is that your bitcoin gets locked on one side of the bridge.On the other side you get the same amount of Ethereum. Now spend some Ethereum and transfer the rest to Bitcoin. So Bridge burns his remaining Ethereum tokens. On the Bitcoin side, you will receive the same amount of her BTC.

This is the same principle as using PayPal for online payments. It doesn’t matter where or what you buy. Or use MasterCard to pay your Visa bill.

What is cross-chain transfer?

A cross-chain transfer is nothing but a transaction between two blockchains. Send assets from the original chain to another chain.

In addition to the bridge, you also need a wallet. Common wallets include MetaMask and Trust Wallet. But there are many other wallets out there. Some are useful for different chains. Others, on the other hand, only work between two chains.

In some cases, you may need to open two wallets. For example, if the receiving wallet does not support her MetaMask or Trust Wallet.

You can send Ethereum to L2 using MetaMask or Trust Wallet. However, if your ETH is in L2, you will need a separate wallet. L2 has another wallet open at the same time. This allows both wallets to connect through the same platform. Once the transfer is complete, you will be able to spend your ETH on L2.

StarkNet, for example, is such a case.Airdrops are imminent and you can find information about airdrops this video.

The diagram below shows how cross-chaining works between different chains. This includes many DeFi platforms.

cross chain

sauce: Moderate

Conclusion

Cross-chain and interoperability are important in cryptocurrencies. They ensure the growth of the crypto space. A cross-chain bridge allows different blockchains to communicate with each other. This means that digital assets can be moved between blockchains. In this article, I answered his four common questions about cross-chain cryptocurrencies.

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