The Inter-Blockchain Communication Protocol will end ecosystem maximalism

When I entered crypto, I succumbed to the competition between blockchain ecosystems, believing that one had to be “better” than others. I have since realized that the future of cryptocurrency brings with it a variety of platforms that will excel at different things. With the Inter-Blockchain Communication Protocol (IBC), I have left behind the time of thinking that chains have to compete and embrace an interconnected interchain future. Let me explain.

Solana, Polkadot, etc. — what do they have in common? They are individual state machines, each trying to achieve something only one has done before: create a sustainable, robust ecosystem of developers, investors and, most importantly, users.

So far, Ethereum shows no signs of slowing down. Since the beginning of summer 2020 with a share of 8% of the total crypto market, Ether (ETH) has since taken almost 20% of the market and stayed there.

There’s a reason why the first sentence of many pitches for layer-1 solutions includes the term “Ethereum Killer.” It’s crypto’s Moby Dick – the king of liquidity. And so many projects take on the challenge of improving Ethereum, to “build it better.” Unfortunately, the first is often a “bridge”. Bridges have exposed users to many risks and resulted in a large number of problems. However, most are blissfully unaware that they are vulnerable to exploits during the bridging process and the entire time that bridged assets are held. Most people also don’t realize that they have nothing more than an IOU.

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The original token representing everything they bought sits on the original chain. In the meantime, they trade the equivalent of a piece of paper.

There are obviously exceptions to the rule. At most, good bridges can reduce the risk, but the bottom line remains the same. Bridges range from centralized to “semi-centralized,” and there’s one thing they can never do: actually move an asset to a new chain. Why? Because the two individual networks that the blockchain assets are connected between have absolutely no way to communicate with each other. They speak different languages ​​because most chains were never designed to communicate with each other.

The existence of bridges is a symptom of a “me vs. you” mentality, where chains try to obtain each other’s liquidity.

The four most expensive decentralized finance hacks in 2022 were all bridge exploits: Ronin, the BNB Smart Chain bridge, Wormhole, and Nomad. In total, users lost more than $2 billion. That’s roughly the same amount users lost as a result of the FTX collapse.

So, what if we change the “me vs. you” mentality to “us vs. centralization”? What if we could come together and decide on communication standards?

While this may not seem radical to some, it is new to crypto. This new system has a name: Inter-Blockchain Communication Protocol, or IBC.

IBC is a standard for messages and interaction between different blockchains at the protocol level. It is the product of many years of work on the idea of ​​different blockchains retaining their sovereignty.

Allowing users to freely flow between different blockchains creates higher capital efficiency and faster innovation. In a way, it mirrors a purely capitalist system where money finds its way to the preferred destination easier, safer and faster. You can compare it to the Schengen area in philosophy.

While IBC is currently a product that only exists in Cosmos, teams like Composable Finance and PolymerDAO are working to bring it to Kusama, Polkadot, Near, and more in the future.

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Is IBC perfect? Of course not. It is only one year old. But its existence is invaluable because it shows what the future of crypto could look like. With IBC, it is possible to move beyond ecosystem wars to create an interoperable, fluid network of different solutions to meet a common challenge: building a permissionless, non-custodial future for all.

IBC is a glimpse into the future of blockchains where ecosystems complement each other and allow users to try out “competitors” frictionlessly so that users can decide which products they want to use without restrictions.

We can move beyond the playground battles of trying to destroy each other’s sandcastles. Instead, let’s use our shovels to build safe roads together.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.