Blockchain is a decentralized, and fully automated database that has become the trendy solution for storing digital information more securely. Based on crypto assets, it offers many new opportunities.
As blockchain flourishes on the way to shaping the new economy with the power of distributed ledgers, cross-network interoperability becomes essential to sustaining this paradigm shift.
All blockchains have their limitations. As they develop in isolated environments and possess different rules and consensus mechanisms, they cannot communicate in a native fashion and tokens cannot move freely between blockchains.
In general, blockchains did not communicate properly — if at all — until bridging mechanisms were developed.
A blockchain bridge — otherwise known as a cross-chain bridge — connects two blockchains and enables token transfers, smart contracts and data exchange (as well as other feedback and instructions between two independent platforms).
Given the growing popularity of blockchain, the need for security and chain validity are now essential. A blockchain is typically verified by nodes, which accept block proposals and enable cryptographic digital signatures.
However, as blockchain becomes more popular, fraudulent activities such as hacking are growing increasingly more common. This is thought to have happened because the firm involved did not store private keys using a multi-signature scheme.
Multisignature Blockchain Schemes
Since it was introduced by Itakura and Nakamura, the multisignature scheme is now widely applied to electronic transactions — including Bitcoin and other cryptocurrencies.
This scheme allows different parties to sign the same document and any verifier to verify the validity of the multisignature. A verifier knows each party participated in signing by transmitting a multisignature instead of individual signatures, reducing the cost of storage and greatly saving on communication costs.
What is more, it requires two or more private keys to sign and send a transaction, adding security to the process. Thus, if hackers want access to your reserves, they’re going to need several keys to do so. Similarly, multisignature ensures no one person in the firm is able to unilaterally withdraw funds from the account.
We designed TOZEX to modernize the process of raising capital for SMEs. In unlocking the value of blockchain technology to finance small and mid-size enterprises and gather the same trustworthy ecosystem of entrepreneurs and investors, we use unique security and governance models that make it possible to build bridges of trust between them.
If you’re seeking out a fully regulated and transparent ecosystem, head this way.