A quick overview of blockchain interoperability
Back in 2009, when blockchain first appeared, interoperability was not an issue. However, as more blockchains emerge and smart contracts increase the versatility of the technology, there is a need to allow individual blockchains to communicate with each other. Unfortunately, without interoperability, blockchain growth is stunted because projects become a one-off venture, rather than a holistic view – meaning countless users are potentially shut out. After reading this article, you will 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 easily move from one site/service to another. As the Internet’s Web3 age emerges, the way blockchains are designed limits interaction between different ecosystems, making it challenging to navigate between services and often meaning logging into different platforms and working in parallel. To put this simply – imagine switching between your Mac and PC, but not being able to continue the work you started on your Mac.
Fortunately, this problem is gradually being solved by a number of different protocols, starting with their internal ecosystems and then moving to external layer 1 blockchains. Each solution works slightly differently, but the goal is the same and there are many similarities. Before we explore the best interoperability solutions, let’s take a look at exactly what they do.
How is interoperability solved?
Extensive research on each interoperability project shows how much work is involved and how it can be handled – 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 blockchain’s base layer. For this method to work, validators are used at both ends of a service – their job is to authenticate information and ensure that it is correct. Parachains are limited because they only allow internal communication between apps, not with external protocols.
- Bridge construction. This method is exactly what it sounds like – bridging the gap between blockchains by allowing data transfer across a “digital bridge”. Each network has a native token, for example Ethereum uses the ERC standard. Every time you send these coins, they must be converted into an acceptable token for the receiving blockchain – which changes the token standard.
- Side chains. Developers are able to create sidechains, which operate almost separately from the main chain. However, they use 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 leaves room for interoperability.
- Creation of certificate. Certificates on blockchains contain verified data, which is recognized across other networks. However, for the receiving chain to confirm receipt, the state transition must be verified using cross-chain messages in the certificates.
The 3 best interoperability solutions
Polka dot
Blockchain interoperability methods outlined above are still evolving and have been for years, but understanding the terminology puts us in a better position to explore existing projects. To kick us off we have Polkadot.
This blockchain leads the charge for interoperability, as their entire ecosystem is underpinned by parachains. In order for the network to function, sharding is used to allow internal applications to communicate with each other. To confirm information, internal validators are used which make transactions much faster.
There is a lot of exciting innovation happening at Polkadot, which is why we recommend reading this comprehensive Polkadot report by following this link. The landing page takes you to a detailed Polkadot abridged version, but you can purchase the full report for a small fee.
Cardano
Cardano is a platform that allows smart contract app development, and it uses certification to exchange information between chains. Allowing cross-chain messaging makes it much easier to verify transactions – among proof-of-stake (PoS) networks. Unfortunately, until further innovation comes, incompatible chains are left out.
Plasma bridge
Plasma Bridge is a layer 2 solution built using the Ethereum network. In this project, atomic swaps are created to transfer information across different blockchains. This project is not the only interoperability solution within the ETH ecosystem. However, it shows high promise due to its proof-of-concept mechanisms.
Chain link
Chainlink is a multi-oracle interface designed to allow 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 an intermediary for blockchains, which uses a series of Chainlink Messaging routers to validate smart contracts before sending them to their final destination.
Conclusion
Real-world blockchain applications have only recently been created, which means there is a lot of work to be done before full interoperability is achieved. If you want to support innovation and support positive change in the blockchain landscape, invest in one of the above projects and tackle the decline in crypto volatility.
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