IBC: Inter-Blockchain Communication

On Tuesday, October 10th 2023, or for most of you reading this simply - tomorrow, I will be doing a fireside chat interview with Zarko Milosevic, the Chief Scientist of Cosmos ecosystem at Splet conference.

Often referred to as the "Internet of Blockchains," Cosmos is a decentralized network of independent, scalable, and interoperable blockchains. The ecosystem aims to solve some of the most pressing challenges facing the blockchain industry today: scalability, usability, and sovereignty.

The core components of the Cosmos ecosystem include:

Tendermint Core: The foundational consensus engine upon which Cosmos is built. It uses a Byzantine Fault Tolerant (BFT) consensus algorithm, which helps achieve high degrees of security and performance.

Cosmos SDK: A modular framework for building blockchain applications. Developers can utilize this toolkit to build custom blockchains without starting from scratch.

Inter-Blockchain Communication (IBC): A protocol that allows different blockchains to communicate and transfer assets or information. IBC enables the interoperability feature that allows various blockchains in the Cosmos ecosystem to interact seamlessly.

ATOM: The native cryptocurrency of the Cosmos network. ATOM is used for staking and governance in the ecosystem.

Hubs and Zones: In the Cosmos network, there are central blockchains called Hubs and connected blockchains called Zones. The main Cosmos Hub keeps track of the state of other chains, ensuring security and facilitating inter-chain communication.

While Cosmos is the Internet of Blockchains pioneer, Inter-Blockchain Communication (IBC) is the concept that stands out to me the most, even outside of Cosmos ecosystem.

As I dive into Fault Tolerant systems interoperability here on Oneiros I will probably be referencing IBC a lot so this article will aim to provide a short overview of IBC, its significance in the Cosmos ecosystem, and its potential impact on the blockchain industry as a whole.

Inter-Blockchain Communication (IBC): A Primer

IBC is essentially a protocol that facilitates the communication and transfer of assets and data between different blockchains. In a universe of isolated blockchain networks, IBC serves as the bridge, ensuring seamless interoperability.

Unlike most bridges IBC operates as a client on the blockchain node level.

Key Features of IBC

1. Interoperability: With IBC, heterogeneous blockchains with diverse applications and token values can communicate and exchange information without a hitch.
2. Trust Minimization: No need to trust a third-party or central authority; the protocol itself ensures that the communication remains secure and valid.
3. Sovereignty: Each blockchain in the Cosmos network retains its governance and consensus mechanisms, allowing individualized customization and control.
4. Scalability: Instead of overloading a single blockchain with transactions, Cosmos uses IBC to spread transactions across multiple chains, thereby improving scalability.

IBC in Action within Cosmos

In the Cosmos universe, application specific blockchains are termed as "Zones," while the central blockchain facilitating the connection between these zones is called the "Hub." IBC enables zones to interact with one another through the Hub, ensuring that:

1. Assets can be transferred between zones: This means tokens or other digital assets can be sent from one blockchain to another within the Cosmos ecosystem.
2. Zones can share information: Data sharing between different blockchains becomes possible, broadening the scope of dApps and other blockchain-based applications.
3. Application-specific chains: Since IBC promotes interoperability, developers can create specific chains for particular applications, knowing they can communicate with other chains.

The Potential Impact of IBC

1. Unified Ecosystem: With IBC, the dream of a connected and interoperable blockchain ecosystem inches closer to reality. Different blockchains will no longer operate in isolation but as parts of a larger, connected universe.
2. Boosting DeFi: The decentralized finance (DeFi) sector stands to gain enormously from IBC. Seamless cross-chain transfers and communications can lead to innovative financial products and services.
3. Innovative Cross-Chain Applications: Developers will have the freedom to conceive applications that utilize resources, data, and assets from multiple chains, leading to more versatile and robust applications.

As the blockchain industry matures, the need for interoperability becomes more pronounced. IBC, as facilitated by the Cosmos ecosystem, is a promising step towards a future where blockchains are not siloed entities but part of a vast, interconnected network.

As development continues and more chains adopt IBC, the potential for transformative blockchain applications grows exponentially.

That is not to say that IBC is perfect.

Personally I love IBC because I believe that bridging protocols that operate on the message level are necessary for truly interconnected fault tolerant distributed systems to deliver true value to the end users.

Core IBC specification is an attempt to define common abstractions for interoperability between two blockchains even if they have different architectures, which is an extremely important undertaking.

The IBC was originally designed bottom-up, from client to packets, with token transfer as an initial use case. This is also how people are normally exposed and onboarded into IBC.

However, different types of implementations might question this line of thinking in the future.