Cosmos Intergalactic IBC - Part 1: What is IBC?
The Internet of Blockchains
As interoperability has become a hot topic in the crypto space, one name stands out as unique, and that name is Cosmos. Earlier this year Cosmos launched the IBC (Inter Blockchain Communication). Since then many chains built using the Cosmos SDK (Software Development Kit) have performed mainnet upgrades to connect to the IBC. Most exciting to me are Terra and Juno, but I’ll deep dive into those two chains in another episode.
So what is the IBC and how does it differ from other chains, interoperable and otherwise?
If you have been in the crypto space for any length of time, then it is likely that you have heard of Ethereum (ETH). Ethereum was the first mover in the smart contract industry that has become the most valuable and most used blockchain after Bitcoin (BTC). Although Ethereum has the benefit of being a first mover and is the most widely adopted blockchain by developers, it has been plagued by issues from its inception. Without diving too deep, the model that it uses is best described as vertical scaling. Any application built using Ethereum is built directly on top of it, therefore relying on Ethereum to be fast and stable, but also must pay Ethereum fees for every transaction placed by the apps users.
One analogy to describe vertical scaling such as what we see with Ethereum, uses a glass of water. Think of Ethereum as the glass and all the apps built on top as water being poured into the glass. Eventually the glass is going to fill and any movement of the liquid in the glass is going to cause it to overflow, let alone adding more liquid to the glass at this point. The only solution to this analogy is to make a bigger glass and transfer all the existing liquid into the bigger glass. The problem we face with this type of scenario is that eventually the size of the glass is going to have to be so big that it becomes unfeasible to build at all.
Enter Cosmos and Tendermint founders Jae Kwon and Ethan Buchman’s vision to create a network of sovereign blockchains connected to each other via a central hub. Now if we re-examine the glass analogy we have multiple glasses, each built using the same materials (Cosmos SDK), but each custom built to the size and shape required for it’s specific purpose. We can have whisky glasses and martini glasses and water glasses, or in technology terms, DEX chains, Smart-contract chains, NFT chains, marketplace chains and any other kind of chain that exists and many more that have yet to come into being. Instead of everyone pouring their liquids into the one glass now everyone has their own glass and through a series of connections which we could think of as tubes or straws, liquids can move freely from one glass to another without the concern of overfilling one glass. Currently the entire Cosmos ecosystem makes up more than 5% of the entire crypto market and is growing at a neck-breaking pace.
In short, the Cosmos IBC allows for a kind of horizontal scaling that allows chains to scale infinitely and still connect to each other without slowing down the network and with minuscule fees compared to other chains, future proofing the blockchain ecosystem. Moreover, the entire network is permissionless and decentralized.
I’ll be deep diving into more chains and aspects of the Cosmos ecosystem over the coming weeks and months so subscribe if you haven’t already to keep up to date with everything Cosmos.
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