Inter-Blockchain Communication (IBC) is a protocol that enables communication and asset transfer between different blockchains. It was first proposed by the Interledger Protocol in 2015, but has since been implemented on many other platforms including Ethereum and Bitcoin. IBC allows users to seamlessly exchange assets across multiple blockchain networks, thus allowing for greater interoperability between them.
IBC works by creating an intermediary layer between two or more blockchains. This layer acts as a bridge and facilitates communications between them using atomic swaps of digital tokens. By leveraging this technology, users can move funds from one chain to another without having to use third-party services like exchanges or custodians.
The primary benefit of IBC is its ability to enable trustless peer-to-peer transactions without relying on a centralized entity for verification or settlement of trades/transfers. Additionally, it also improves scalability due to its capability of offloading some operations from the underlying chains onto the intermediary layer – thus reducing congestion on those networks while still ensuring security with cryptographic signatures provided by each chain’s consensus mechanism(s).
Currently, there are various projects working towards developing IBC protocols such as Cosmos Hub, AION Network and Polkadot Network which have already achieved notable successes in terms of interconnectivity among different blockchains so far – however they are yet still in their early stages with much work left before mass adoption can be expected within the industry at large.
