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TLDR:

So you learned what an IBC is and how important it is to the Cosmos ecosystem. This feature makes the cryptocurrencies built on Cosmos easier to interact with and more efficient to use capital. This protocol creates the infrastructure for tokens to communicate across various blockchain tech stack.

General Conclusion

If you are active in the Cosmos Network, one of the first terms you will come across is IBC (Inter Blockchain Communication) and IBC is a very important feature of Cosmos Network. So what exactly is IBC and why is it important to the Cosmos Network?

3 Approaches To Improve Blockchain Scalability

With Ethereum as the standard, there are currently three main ways blockchain infrastructure seeks to improve the scalability & scale of smart contracts.

1. The first way is through the use of Rollup technology, which allows the wrapping of transactions taking place in L1 on the sidechain into a single aggregated block and recorded on the original L1 Blockchain. This allows off-chain transaction data to be available on layer 1 whenever needed to validate a state transition. This is the Layer 2 extension technology that Ethereum is using.
   Check this video as Lisa explains what Rollup technology is.
   You can imagine it like creating a school bus for transactions on Ethereum. Although they are not arbitrarily scalable, they are a good short & medium term way to relieve congestion pressure. Imagine a school bus sending 50 kids instead of 50 cars on the road!
2. The second path is to build a brand new Layer 1 blockchain to achieve higher throughput and scalability using other technologies.
   For example, in the case of Solana & Internet Computer to achieve higher throughput, they require each node to be extremely powerful. (Side note: this is the reason why Solana went offline for a while in Sept.)
   This means that transaction processing is no longer performed by the vast majority of ordinary users because to do so they will need to invest a large amount of money in computer hardware, which is suitable. with individuals or organisations that are technically savvy and have ample financial resources. This is of course a trade-off as it affects the decentralisation of the blockchain.
   In our analogy, that means bigger buses to transport people.
3. The third path is to combine heterogeneous blockchains through “interaction protocols”. They are like building a system of highways across the country, connecting a series of provinces in a Country making travel easy and fast. Prominent projects in the third group can be mentioned as Cosmos, Polkadot, Avalanche.