The future of enterprise blockchain is multi-chain

Blockchain interoperability – connecting multiple networks to allow data and value to flow seamlessly – is often envisioned in the context of consumer applications. Think DEXs that add support for a variety of EVM networks, or blockchain bridges that connect to the next trendy DeFi ecosystem.

But interoperability has far wider implications than allowing traders to jump chains on a whim. In fact, one of the biggest beneficiaries of the maturation of multi-chain interoperability will be enterprises. As enterprise solutions grow across industries, the need to engage with multiple chains rather than existing on a single, isolated blockchain increases.

The benefits of connecting to a fully interoperable blockchain ecosystem are many, supporting future-proof solutions that make it easy to migrate from one platform to another while amplifying the network effects of a shared business landscape to expand capacity, accessibility and choice for network participants.

What companies want

Over the past five years, businesses of all kinds have found use cases for blockchain, ranging from supply chain management to healthcare. Although the applications are as diverse as the companies themselves, their requirements are largely the same. Companies that use blockchain do so mainly in the pursuit of greater trust, security, transparency and data traceability. If a blockchain can deliver these capabilities to a greater extent than a legacy system, it is easy to add Web3 benefits to existing solutions.

Blockchain’s ability to securely automate processes that previously required massive manpower, physical infrastructure and multiple intermediaries means that businesses can achieve massive increases in operational efficiency while drastically reducing costs. But expecting every vendor and supplier to use the same chain as a single organization significantly hinders the likelihood of mass adoption – especially when supplier networks are large and complex.

Collaboration across chains

The options for blockchain protocols have increased significantly in recent years for both private and public chains. Each blockchain comes with its own unique advantages and disadvantages, meaning that any business that confines itself to one chain fails to exploit the full potential of the benefits that different blockchain technologies can offer.

For example, private blockchains are well suited for protecting intellectual property but are limited by their permission. Conversely, public chains enable global access and multiple data points, but users are at the mercy of other devices, which can lead to unpredictable network costs and bottlenecks.

Join the community where you can transform the future. Cointelegraph Innovation Circle brings blockchain technology leaders together to connect, collaborate and publish. Apply today

The easiest way to think of this is as a series of roads. A factory in the middle of the desert isn’t going to do much business until it’s connected to public highways. It might work wholesale with neighboring manufacturers, but local roads will only carry it so far. Only when connected to the interstate can it begin to transmit globally.

Multiple chains are important

Companies that want to use blockchain do not lack options. Public and private solutions such as Quorum, Hyperledger Fabric, Polygon and Ethereum are all readily available and proven (Simba Chain has an affiliation with both the Hyperledger Foundation and Polygon). However, interoperability between blockchains is essentially non-existent. If a blockchain solution cannot effectively share legacy data or connect to existing on-chain data infrastructure, its value proposition is severely weakened.

One of the biggest obstacles to greater interoperability is the absence of a shared programming language between blockchains. This increases the cost and complexity of creating multi-chain applications.

An interoperable future

Although multi-chain solutions can play an important role in eliminating barriers to cross-chain functionality, they cannot unilaterally deliver full interoperability. Solving this broader problem requires efforts from a cross-section of companies operating within the blockchain ecosystem, from the base layer to the application layer. Over the past two years, countless dollars and hours have been poured into this challenge, and the results are beginning to show.

Blockchain bridges are booming and being used for much more than moving tokens. Cross-chain messaging is now routinely used to trigger smart contracts, query data from third-party applications, and resolve events initiated on different chains.

Meanwhile, multi-chain applications are being developed that remain untraceable to any ecosystem, instead taking their liquidity or data from whichever chain delivers it at the best speed. Because of these innovations, it no longer requires a 100-member development team to create applications that leverage multi-chain environments. As a result, small and medium-sized businesses, large corporations and public institutions can take advantage of this powerful functionality.

Given the diversity of global business, it is inevitable that companies will emerge with blockchain solutions that exist across dozens of private and public chains. It’s just as likely that solutions will emerge that allow these siled systems to work as one, enabling companies to create powerful blockchain solutions that aren’t limited by network or language. In short, the future of enterprise blockchain is intertwined with interoperability—and it’s closer than you think.

Bryan Ritchie is the CEO of SIMBA Chain, the leading API development platform to help businesses move from Web2 to Web3.

This article was published through the Cointelegraph Innovation Circle, a researched organization of top executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.

Learn more about the Cointelegraph Innovation Circle and see if you qualify to join