What are cross-chain bridges?

Amanda Jackson Cross-chain bridges are software applications that enable transactions to occur between various blockchains. If someone wants to transfer cryptocurrency, non-fungible tokens (NFTs), or other digital assets between blockchain networks, cross-chain bridges are an essential part of the process.

What is a crypto bridge?

A crypto bridge (also known as a cross-chain bridge) is a tool that gives you the power to transfer digital assets and information from one blockchain to another. Interoperability has long been a pain point in blockchain technology. While highly powerful technologies by themselves, cross-chain data transfer can be tedious and expensive.

Are cross-chain bridges a target for hackers?

Cross-chain bridges can also be a lucrative target for hackers. In February 2022, cross-chain bridge platform Wormhole was the victim of an attack in which the threat actor stole 120,000 wrapped Ethereum tokens -- worth an estimated $320 million at the time of the theft. Learn more about how cryptocurrency cyber attacks are on the rise.

What are blockchain bridges and how do they work?

Bridges connect different blockchains or a layer one blockchain, such as Ethereum, to its side chains or layer two networks, allowing users to move digital assets from one chain to another. Scalability: Highly performant bridges can help mitigate the scalability of the host chain (e.g. Ethereum) without losing liquidity and network effects.