The development of Blockchain gave us DeFi, NFTs, Alt-L1s. Next

Few will deny the huge impact of blockchains on the 21st century. After less than 15 years, blockchain has made great strides in decentralizing our society. Starting with relatively simple currencies like Bitcoin, and scaling up to the many DeFi applications out there today – the financial world would not be where it is without blockchain.

NFTs, tell a similar story, after making a massive impact in the art world, with some of the greatest modern artists out there imprinting their own NFTs. They have also influenced other segments of the entertainment industry with things like games to make money in the market.

All L1s are currently trying to revolutionize the blockchain as we know it, by providing outstanding scalability. However, each of these enormous advances presented a plateau. Our technology needed a breakthrough to reach the next level. Today we will talk about one of the most important concepts and biggest battles in the blockchain world – interoperability. We will also go through some of the brave pioneers who want to solve this problem.

What is interoperability and why does it matter?

Interoperability in computer technology is the software’s ability to communicate with other software to efficiently transfer and process information. The reason why this is important is that it is often necessary for several systems to speak and understand each other.

In the blockchain world, interoperability is a little more poorly defined, but it refers to all the ways and techniques we have available that allow blockchains to transfer information, assets and data between each other. Bridges like Binance Bridge are a good example of this. Today, many projects, including some promising listings to the site that t3rn trying to solve this problem.

How the lack of interoperability stifles our progress

Ethereum, Polkadot, Bitcoin, Cardano, XRP and more are all very different blockchains. If you have ever wanted to use Bitcoin to buy an NFT in ETH, or invest in the latest Cardano project, you have experienced some of the issues we are going to talk about today.

First of all, there are the transfer fees and general problems of finding a bridge or other method of translating one currency into another.

Second, you can not easily exchange an asset on one of these chains for an asset on another chain, since they do not have many ways to communicate this trade with each other.

It would also be nice if we could mix and match different protocols to create creative Web3 platforms with interoperable smart contracts. Currently, smart contracts usually only work with one blockchain – the one they are made for (with a few exceptions that work on a select few), which makes them limited.

All of these factors may seem small on their own, but together they create a great deal of pressure that each upcoming project must find its own way to deal with. It also presents a major user convenience issue, and while convenience may be easy to underestimate, that’s why you do not have to go to a library to check when Bitcoin was funded.

The benefits of blockchain interoperability

Although blockchains today such as Solana and Ethereum provide massive, wild-growing ecosystems in them, these ecosystems have a very limited capacity to interact with each other. Some of the biggest benefits interoperability will provide are:

• Smart contract interoperability: If smart contracts could be easily enforced across chains. Some platforms that focus on this, such as t3rn, also ensure that all contracts in their registry can be used by anyone, while the developers of the contract can choose to get paid when their code is run. Interoperable smart contracts can revolutionize certain fields such as business, law or healthcare by ensuring that information can be transferred between private and public networks in a secure and adaptable way.
• Web3 customization: Being able to mix and match different blockchain applications and protocols can allow us to create new and exciting Web3 instruments. This will eventually lead to multi-token transactions and system development.
• Convenience: An often underestimated, yet powerful force. Making Web3 more practical is the most important step towards widespread acceptance. Interoperability ensures that beginners need to know much less about the blockchain and its intricacies to jump into space.
• More decentralization: While decentralization within an individual blockchain network is the # 1 priority for many blockchain projects today, if we were able to set up an interoperable system with multiple blockchains, it would be an even more advanced form of decentralization.

Elements of interoperability

There are some different approaches to interoperability that are under development. Some of these are:

• Side chains: Side chains are a kind of layer 2 platforms. They represent a separate blockchain network that is fully compatible with a single chain called the main chain. Polkadot, for example, was designed to provide side-chain support and achieve what they call “a network of networks.”
• Smart Contract Hosting Platforms: Possibly the most important element of interoperability is interoperable smart contracts. Smart contract hosting platforms that allow their users to host their contracts on them, and then execute them on a variety of chains. They also open a door to a new world of open source development that helps us make the breakthroughs we need to bring Web3 faster.
• Bridge and switching technologies: Bridges and switching are both important elements for interoperability. Bridges allows an asset owned by you to be locked in while an identical asset is embossed in another chain and sent to one of your addresses. Nuclear exchange, on the other hand, allows people to exchange different tokens in a decentralized way.

Closing words

Every major advance in blockchain such as NFTs, DeFi or the like has required us to reach and break through a technological plateau. However, our technology is being tested again, and the biggest barrier to Web3 is our lack of interoperability.

Interoperability enables a truly connected blockchain, with smart contracts that can be executed across multiple chains, and easy asset transfers from one chain to another. Also, a truly interoperable blockchain is one that is much more convenient to get into.

Projects are already underway to create a more interoperable blockchain. Bridges like Binance Bridge allow you to trade assets across chains, while smart contract hosting services like t3rn ensure that our smart contracts can be executed in the multi-chain environments of the future.