Bridge (blockchain bridge)
A bridge connects two blockchains and allows tokens to be moved from one to the other.
Explained simply
Blockchains are separate worlds: a bitcoin exists only on the Bitcoin blockchain, an ether only on Ethereum. Anyone wanting to move value between the worlds needs a bridge.
Technically the token is locked on the source chain and a copy is issued on the target chain ("wrapped"). On the way back the copy is destroyed and the original released.
Bridges are among the most frequently hacked components of the crypto world because they concentrate large values in one place.
From the familiar world
A depositary receipt: you hand gold to a custodian and receive a paper you can trade elsewhere. The paper is only as safe as the custodian. For a bridge the custodian is a smart contract or a consortium.
An example
"Wrapped Bitcoin" is bitcoin represented on Ethereum via a bridge so it can be used in DeFi applications there. For every wrapped bitcoin a real bitcoin sits with the custodian.
Why it matters
Bridges explain why the crypto world is connected despite many blockchains, and why the biggest security incidents happen precisely at these crossings. A point that belongs in any risk assessment.
To pass on
„A bridge is the depositary receipt between two blockchains. Handy, but a popular target for attacks.“
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