cosmos-sdk/docs/guide/ibc.md

# InterBlockchain Communication with Basecoin

One of the most exciting elements of the Cosmos Network is the InterBlockchain
Communication (IBC) protocol, which enables interoperability across different
blockchains. We implemented IBC as a basecoin plugin, and we'll show you how to
use it to send tokens across blockchains!

Please note, this tutorial assumes you are familiar with [Basecoin
plugins](/docs/guide/basecoin-plugins.md), but we'll explain how IBC works. You
may also want to see [our repository of example
plugins](https://github.com/tendermint/basecoin-examples).

The IBC plugin defines a new set of transactions as subtypes of the `AppTx`.
The plugin's functionality is accessed by setting the `AppTx.Name` field to
`"IBC"`, and setting the `Data` field to the serialized IBC transaction type.

We'll demonstrate exactly how this works below.

## IBC

Let's review the IBC protocol.  The purpose of IBC is to enable one blockchain
to function as a light-client of another.  Since we are using a classical
Byzantine Fault Tolerant consensus algorithm, light-client verification is
cheap and easy: all we have to do is check validator signatures on the latest
block, and verify a Merkle proof of the state.

In Tendermint, validators agree on a block before processing it.  This means
that the signatures and state root for that block aren't included until the
next block.  Thus, each block contains a field called `LastCommit`, which
contains the votes responsible for committing the previous block, and a field
in the block header called `AppHash`, which refers to the Merkle root hash of
the application after processing the transactions from the previous block.  So,
if we want to verify the `AppHash` from height H, we need the signatures from
`LastCommit` at height H+1. (And remember that this `AppHash` only contains the
results from all transactions up to and including block H-1)

Unlike Proof-of-Work, the light-client protocol does not need to download and
check all the headers in the blockchain - the client can always jump straight
to the latest header available, so long as the validator set has not changed
much.  If the validator set is changing, the client needs to track these
changes, which requires downloading headers for each block in which there is a
significant change. Here, we will assume the validator set is constant, and
postpone handling validator set changes for another time.

Now we can describe exactly how IBC works.  Suppose we have two blockchains,
`chain1` and `chain2`, and we want to send some data from `chain1` to `chain2`.
We need to do the following:
 1. Register the details (ie. chain ID and genesis configuration) of `chain1`
    on `chain2`
 2. Within `chain1`, broadcast a transaction that creates an outgoing IBC
    packet destined for `chain2`
 3. Broadcast a transaction to `chain2` informing it of the latest state (ie.
    header and commit signatures) of `chain1`
 4. Post the outgoing packet from `chain1` to `chain2`, including the proof
    that it was indeed committed on `chain1`. Note `chain2` can only verify
this proof because it has a recent header and commit.

Each of these steps involves a separate IBC transaction type. Let's take them
up in turn.

### IBCRegisterChainTx

The `IBCRegisterChainTx` is used to register one chain on another.  It contains
the chain ID and genesis configuration of the chain to register:

```golang
type IBCRegisterChainTx struct { BlockchainGenesis }

type BlockchainGenesis struct { ChainID string Genesis string }
```

This transaction should only be sent once for a given chain ID, and successive
sends will return an error.


### IBCUpdateChainTx

The `IBCUpdateChainTx` is used to update the state of one chain on another.  It
contains the header and commit signatures for some block in the chain:

```golang
type IBCUpdateChainTx struct {
  Header tm.Header
  Commit tm.Commit
}
```

In the future, it needs to be updated to include changes to the validator set
as well.  Anyone can relay an `IBCUpdateChainTx`, and they only need to do so
as frequently as packets are being sent or the validator set is changing.

### IBCPacketCreateTx

The `IBCPacketCreateTx` is used to create an outgoing packet on one chain.  The
packet itself contains the source and destination chain IDs, a sequence number
(i.e. an integer that increments with every message sent between this pair of
chains), a packet type (e.g. coin, data, etc.), and a payload.

```golang
type IBCPacketCreateTx struct {
  Packet
}

type Packet struct {
  SrcChainID string
  DstChainID string
  Sequence   uint64
  Type string
  Payload    []byte
}
```

We have yet to define the format for the payload, so, for now, it's just
arbitrary bytes.

One way to think about this is that `chain2` has an account on `chain1`.  With
a `IBCPacketCreateTx` on `chain1`, we send funds to that account.  Then we can
prove to `chain2` that there are funds locked up for it in it's account on
`chain1`.  Those funds can only be unlocked with corresponding IBC messages
back from `chain2` to `chain1` sending the locked funds to another account on
`chain1`.

### IBCPacketPostTx

The `IBCPacketPostTx` is used to post an outgoing packet from one chain to
another.  It contains the packet and a proof that the packet was committed into
the state of the sending chain:

```golang
type IBCPacketPostTx struct {
  FromChainID     string // The immediate source of the packet, not always Packet.SrcChainID
  FromChainHeight uint64 // The block height in which Packet was committed, to check Proof Packet
  Proof *merkle.IAVLProof
}
```

The proof is a Merkle proof in an IAVL tree, our implementation of a balanced,
Merklized binary search tree.  It contains a list of nodes in the tree, which
can be hashed together to get the Merkle root hash.  This hash must match the
`AppHash` contained in the header at `FromChainHeight + 1`

- note the `+ 1` is necessary since `FromChainHeight` is the height in which
  the packet was committed, and the resulting state root is not included until
the next block.

### IBC State

Now that we've seen all the transaction types, let's talk about the state.
Each chain stores some IBC state in its Merkle tree.  For each chain being
tracked by our chain, we store:

- Genesis configuration
- Latest state
- Headers for recent heights

We also store all incoming (ingress) and outgoing (egress) packets.

The state of a chain is updated every time an `IBCUpdateChainTx` is committed.
New packets are added to the egress state upon `IBCPacketCreateTx`.  New
packets are added to the ingress state upon `IBCPacketPostTx`, assuming the
proof checks out.

## Merkle Queries

The Basecoin application uses a single Merkle tree that is shared across all
its state, including the built-in accounts state and all plugin state. For this
reason, it's important to use explicit key names and/or hashes to ensure there
are no collisions.

We can query the Merkle tree using the ABCI Query method.  If we pass in the
correct key, it will return the corresponding value, as well as a proof that
the key and value are contained in the Merkle tree.

The results of a query can thus be used as proof in an `IBCPacketPostTx`.

## Relay

While we need all these packet types internally to keep track of all the proofs
on both chains in a secure manner, for the normal work-flow, we can run a relay
node that handles the cross-chain interaction.

In this case, there are only two steps.  First `basecoin relay init`, which
must be run once to register each chain with the other one, and make sure they
are ready to send and recieve. And then `basecoin relay start`, which is a
long-running process polling the queue on each side, and relaying all new
message to the other block.

This requires that the relay has access to accounts with some funds on both
chains to pay for all the ibc packets it will be forwarding.

## Try it out

Now that we have all the background knowledge, let's actually walk through the
tutorial.

Make sure you have installed [basecoin and basecli](/docs/guide/install.md).

Basecoin is a framework for creating new cryptocurrency applications.  It comes
with an `IBC` plugin enabled by default.

You will also want to install the [jq](https://stedolan.github.io/jq/) for
handling JSON at the command line.

If you have any trouble with this, you can also look at the [test
scripts](/tests/cli/ibc.sh) or just run `make test_cli` in basecoin repo.
Otherwise, open up 5 (yes 5!) terminal tabs....

### Preliminaries

```
# first, clean up any old garbage for a fresh slate...
rm -rf ~/.ibcdemo/
```

Let's start by setting up some environment variables and aliases:

```
export BCHOME1_CLIENT=~/.ibcdemo/chain1/client
export BCHOME1_SERVER=~/.ibcdemo/chain1/server
export BCHOME2_CLIENT=~/.ibcdemo/chain2/client
export BCHOME2_SERVER=~/.ibcdemo/chain2/server
alias basecli1="basecli --home $BCHOME1_CLIENT"
alias basecli2="basecli --home $BCHOME2_CLIENT"
alias basecoin1="basecoin --home $BCHOME1_SERVER"
alias basecoin2="basecoin --home $BCHOME2_SERVER"
```

This will give us some new commands to use instead of raw `basecli` and
`basecoin` to ensure we're using the right configuration for the chain we want
to talk to.

We also want to set some chain IDs:

```
export CHAINID1="test-chain-1"
export CHAINID2="test-chain-2"
```

And since we will run two different chains on one machine, we need to maintain
different sets of ports:

```
export PORT_PREFIX1=1234
export PORT_PREFIX2=2345
export RPC_PORT1=${PORT_PREFIX1}7
export RPC_PORT2=${PORT_PREFIX2}7
```

### Setup Chain 1

Now, let's create some keys that we can use for accounts on test-chain-1:

```
basecli1 keys new money
basecli1 keys new gotnone
export MONEY=$(basecli1 keys get money | awk '{print $2}')
export GOTNONE=$(basecli1 keys get gotnone | awk '{print $2}')
```

and create an initial configuration giving lots of coins to the $MONEY key:

```
basecoin1 init --chain-id $CHAINID1 $MONEY
```

Now start basecoin:

```
sed -ie "s/4665/$PORT_PREFIX1/" $BCHOME1_SERVER/config.toml

basecoin1 start &> basecoin1.log &
```

Note the `sed` command to replace the ports in the config file.
You can follow the logs with `tail -f basecoin1.log`

Now we can attach the client to the chain and verify the state.
The first account should have money, the second none:

```
basecli1 init --node=tcp://localhost:${RPC_PORT1} --genesis=${BCHOME1_SERVER}/genesis.json
basecli1 query account $MONEY
basecli1 query account $GOTNONE
```

### Setup Chain 2

This is the same as above, except with `basecli2`, `basecoin2`, and
`$CHAINID2`.  We will also need to change the ports, since we're running
another chain on the same local machine.

Let's create new keys for test-chain-2:

```
basecli2 keys new moremoney
basecli2 keys new broke
MOREMONEY=$(basecli2 keys get moremoney | awk '{print $2}')
BROKE=$(basecli2 keys get broke | awk '{print $2}')
```

And prepare the genesis block, and start the server:

```
basecoin2 init --chain-id $CHAINID2 $(basecli2 keys get moremoney | awk '{print $2}')

sed -ie "s/4665/$PORT_PREFIX2/" $BCHOME2_SERVER/config.toml

basecoin2 start &> basecoin2.log &
```

Now attach the client to the chain and verify the state.
The first account should have money, the second none:

```
basecli2 init --node=tcp://localhost:${RPC_PORT2} --genesis=${BCHOME2_SERVER}/genesis.json
basecli2 query account $MOREMONEY
basecli2 query account $BROKE
```

### Connect these chains

OK! So we have two chains running on your local machine, with different keys on
each.  Let's hook them up together by starting a relay process to forward
messages from one chain to the other.

The relay account needs some money in it to pay for the ibc messages, so for
now, we have to transfer some cash from the rich accounts before we start the
actual relay.

```
# note that this key.json file is a hardcoded demo for all chains, this will
# be updated in a future release
RELAY_KEY=$BCHOME1_SERVER/key.json
RELAY_ADDR=$(cat $RELAY_KEY | jq .address | tr -d \")

basecli1 tx send --amount=100000mycoin --sequence=1 --to=$RELAY_ADDR--name=money
basecli1 query account $RELAY_ADDR

basecli2 tx send --amount=100000mycoin --sequence=1 --to=$RELAY_ADDR --name=moremoney
basecli2 query account $RELAY_ADDR
```

Now we can start the relay process.

```
basecoin relay init --chain1-id=$CHAINID1 --chain2-id=$CHAINID2 \
  --chain1-addr=tcp://localhost:${RPC_PORT1} --chain2-addr=tcp://localhost:${RPC_PORT2} \
  --genesis1=${BCHOME1_SERVER}/genesis.json --genesis2=${BCHOME2_SERVER}/genesis.json \
  --from=$RELAY_KEY

basecoin relay start --chain1-id=$CHAINID1 --chain2-id=$CHAINID2 \
  --chain1-addr=tcp://localhost:${RPC_PORT1} --chain2-addr=tcp://localhost:${RPC_PORT2} \
  --from=$RELAY_KEY &> relay.log &
```

This should start up the relay, and assuming no error messages came out,
the two chains are now fully connected over IBC.  Let's use this to send
our first tx accross the chains...

### Sending cross-chain payments

The hard part is over, we set up two blockchains, a few private keys, and
a secure relay between them.  Now we can enjoy the fruits of our labor...

```
# Here's an empty account on test-chain-2
basecli2 query account $BROKE
```

```
# Let's send some funds from test-chain-1
basecli1 tx send --amount=12345mycoin --sequence=2 --to=test-chain-2/$BROKE --name=money
```

```
# give it time to arrive...
sleep 2
# now you should see 12345 coins!
basecli2 query account $BROKE
```

You're no longer broke! Cool, huh?
Now have fun exploring and sending coins across the chains.
And making more accounts as you want to.

## Conclusion

In this tutorial we explained how IBC works, and demonstrated how to use it to
communicate between two chains.  We did the simplest communciation possible: a
one way transfer of data from chain1 to chain2.  The most important part was
that we updated chain2 with the latest state (i.e. header and commit) of
chain1, and then were able to post a proof to chain2 that a packet was
committed to the outgoing state of chain1.

In a future tutorial, we will demonstrate how to use IBC to actually transfer
tokens between two blockchains, but we'll do it with real testnets deployed
across multiple nodes on the network. Stay tuned!