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How Bridging Works

Blockchain bridge explained

"Blockchain bridges work just like the bridges we know in the physical world. Just as a physical bridge connects two physical locations, a blockchain bridge connects two blockchain ecosystems. Bridges facilitate communication between blockchains through the transfer of information and assets." - Ethereum

Bridges offer a compatible and comprehensive way to securely interoperate – when a token is transferred from one blockchain to another, the token will be “wrapped” and converted to a token based on the target blockchain.

Types of blockchain bridges:

Unidirectional & bi-directional

Certain blockchain bridges are unidirectional bridges or one-way bridges. One-way bridges permit you to port assets only in one direction to the target blockchain, warranting no receiving of tokens.

Bi-directional, or two-way bridges, permit the user to freely convert assets to and from blockchains without transfer limitations.

Centralized & decentralized

There are also centralized and decentralized bridges. Centralized (also referred to as custodial or trusted bridges) warrants trust and a central authority regulating and operating the system and requires users to place trust and custody of their tokens in an operator for the transferring of tokens. Centralized bridges have trust assumptions concerning the custody of funds and security of the bridge, relying on the bridge operator’s credibility. This type of bridge relies on external verifiers that stray from the security protocols of the underlying blockchain, thus making it less crypto-economically secure.

Decentralized (also referred to as non-custodial or trustless bridges) place confidence and custody in the algorithm and smart contracts built into the code. Decentralized bridges thus operate and delegate on the same underlying blockchain’s security protocols. The use of smart contracts puts users fully in control of their funds - offering transparency to combat corruption or the abuse of power by operators (which could be the case in a centralized blockchain).

Why use a blockchain bridge

Bridges exist to connect blockchains, allowing the transfer of information and tokens between them.

  • Blockchain bridges enable cross-chain interoperability
  • Bridges on Telos offers a cost-effective and faster approach than what users may find on another native blockchain with high transaction fees and sluggish throughput.
  • Bridges allow users to access new platforms and leverage the benefits of different chains
  • Bridges fulfill the role of being multipurpose to facilitate the exchange of any type of data including smart contract calls, decentralized identifiers and off-chain information like stock market feeds.
  • Bridges enable dApps to access the strengths of various blockchains – thus enhancing their capabilities (as protocols now have more design space for innovation).
  • Through using bridges, developers from different blockchain ecosystems can collaborate and build new platforms.

Risks Involved

Bugs & hacks
Bridges are not immune to bugs in the code that pose a risk to smart contracts and the possibility of users losing their funds. Technological glitches, user errors and software failure all pose risks to the secure use of bridges.
Another risk factor to take into consideration is the possibility of the blockchain's security being compromised due to malicious hacking attempts that pose a threat to one’s funds.

With centralized bridges, the operators that have custody over users' assets can mismanage and be negligent with users' funds as result of a third-party interference - such as a government requesting to freeze assets.

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