Making cross-chain operations instant - with minimum cost of risk

Moving information between blockchains instantly presents a series of problems that any project attempting to do so must overcome (and currently doesn’t).

Because the security of information stored on a blockchain increases the older a block gets, the most recent information is actually not very secure (see “How secure is a block?” below). Very recent information sent between two blockchains across a bridge can create inconsistent balances through reorganizations (think of it as if your bank shows two different balances for your account on the ATM and your online banking app) and it’s more vulnerable to malicious attacks or errors in a bridge’s software.

To solve these issues, Coinweb adds a time delay for information passing between two blockchains. This means that by the time the information has made it to the other side, it is already much more secure. This means that malicious attacks become multiple times more expensive. Simultaneously, Coinweb relies on an information market to instantly pass information between chains. This happens through information traders that see messages passing through Coinweb’s delay pipes and offer to send the transactions immediately to the other side.

These traders offer a bond, which they lose if their information doesn’t match the original message once it has passed through. This means that reorganizations and software bugs affect the information trader and not the blockchains on the other side. As a result, both chains remain perfectly in sync and there’s no risk of software errors affecting the underlying chains.

Information traders price these risks into the fees they charge. Those traders with the technology to minimize mistakes will outcompete everyone else, creating an information market that becomes more efficient over time.

How secure is a block?

Think of it like this: the latest block of a blockchain has a given security based on the number of miners verifying its content. Let’s say the latest block has a security score of 10 because 1000 miners competed to produce it. On average you would need at least 1001 miners to corrupt the information in that block. However, because blockchains make each block dependent on the previous block, you’d need 2,000 miners to corrupt the next older block, 3,000 for the block after that and so on.

This is one of the reasons that older blockchains are so valuable and why it would be next to impossible to change information that’s been stored on Bitcoin many years ago.