A Quick Overview of Blockchain Interoperability
Back in 2009, when blockchain first emerged, interoperability wasn’t an issue. However, as more blockchains emerge and smart contracts boost the versatility of the technology, there’s a need to allow individual blockchains to communicate with each other. Unfortunately, without interoperability, blockchain growth is stunned because projects become a singular venture, rather than a holistic view – meaning countless users are potentially shut off. By the time you’ve read this article, you’ll understand what interoperability is and know where the best solutions are.
What Is Interoperability?
The internet, as it is today, is easy to navigate and allows users to move from one page/service to another with ease. However, as the Web3 age of the internet emerges, the way blockchains are designed limits interaction between different ecosystems, making it challenging to navigate between services, and often means logging into different platforms and working parallel. To put this simply – imagine switching between Mac and PC but being unable to continue with the work you started on the Mac.
Fortunately, this problem is steadily being fixed by a range of different protocols, starting with their internal ecosystems and then moving onto external layer 1 blockchains. Each solution operates slightly differently, but the goal is the same and there are many similarities. Before exploring the best interoperability solutions, we’re going to take a look at exactly what they do.
How Interoperability Is Being Solved?
Extensive research on each interoperability project highlights how much work is involved, and how it can be tackled – see the following examples:
- Parachains. Sharding is used on blockchains to partition a network. This setup allows multiple chains to operate in parallel within the base layer of the blockchain. For this method to work, validators are used on both ends of a service – their job is to authenticate information and ensure it is correct. Parachains are limited because they only allow internal communication between apps, not with external protocols.
- Bridging. This method is exactly what it sounds like – plugging the gap between blockchains by allowing data transference across a “digital bridge”. Every network has a native token, for example, Ethereum uses the ERC standard. Whenever you send these coins, they need to be converted into an acceptable token for the receiving blockchain – altering the token standard.
- Sidechains. Developers are able to create sidechains, which almost operate separately from the main chain. However, they utilize internal blockchain mechanics to allow them to communicate with other network services. Sidechains can create their own certificates, which increases scalability across a chain but allows room for interoperability.
- Certificate creation. Certificates on blockchains hold verified data, which are recognized across other networks. However, for the receiving chain to confirm receipt, the state transition needs to verify using the cross-chain messaging within the certificates.
The Top 3 Interoperability Solutions
Blockchain interoperability methods outlined above are still in development and have been for years, but understanding the terminology puts us in a greater position to explore existing projects. To kick us off, we have Polkadot.
This blockchain is leading the charge for interoperability, as their entire ecosystem is underpinned by parachains. To allows the network to operate, sharding is used to allow internal applications to communicate with each other. To confirm information, internal validators are used, making transactions much faster.
There’s a lot of exciting innovation happening at Polkadot, which is why we recommend reading this extensive Polkadot report by following this link. The landing page will take you to a detailed Polkadot abridged version, but you can buy the full report for a small fee.
Cardano is a platform allowing smart contract app development, and it uses certification to exchange information between chains. Allowing cross-chain messages makes it much easier for confirmation of transactions – amongst PoS (proof-of-stake) networks. Unfortunately, until further innovation comes along, incompatible chains are left out of the loop.
Plasma Bridge is a layer 2 solution that’s built using the Ethereum network. In this project, atomic swaps are made to transfer information across different blockchains. This project isn’t the only interoperability solution within the ETH ecosystem. However, it demonstrates high promise because of its proof-of-concept mechanisms.
Chainlink is a multi-oracle interface designed for allowing information to be sent securely from off-chain locations to on-chain networks. However, it also has a Cross-Chain Interoperability Protocol (CCIP). This is a go-between for blockchains, which uses a series of Chainlink Messaging Routers to validate smart contracts before sending them to the final destination.
Blockchain applications in the real world have only recently been created, meaning there’s plenty of work left to be done until full interoperability is achieved. If you want to back innovation and support positive change within the blockchain landscape, invest in one of the above projects and weather the downs of crypto volatility.
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