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The Push For Blockchain Interoperability

CryptocurrencySep 18, 2021 09:00AM ET
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The Push For Blockchain Interoperability

  • Developing an interoperable network will grow blockchain implementation efforts and expansions.
  • Blockchain ecosystems need to be flexible and willing to interact across ecosystems for the technology to be adopted.
  • Efforts to develop an interoperable network are still in the early stages.

Developments focused on blockchain innovation are rapidly changing as blockchain’s popularity increased over the years. As blockchain is rapidly disrupting more than just the financial markets, demand for agnostic/cross-chain developments is essential. Prioritizing developments is negotiated by projects, each hoping to solve one crucial element and increase mass adoption.

More Than Just a $2 Trillion Stake

The current market capitalization is $2 trillion despite blockchains behaving as singular and self-reliant blockchains. Unfortunately, this creates communities that damage the industry’s natural growth: Dogecoin’s creator labelled the crypto mentality as a get-rich-quick scheme that benefits only the wealthy, simply because the current behaviors of both investors and developers are focused on their projects’ success.

Interoperability will de-scrutinize the industry’s stigma of being a means for speculation. Naveen Joshi, director at Allerin Process Automation, highlights that interoperability will make adoption at the business level easier, decreasing its technological and implementation barrier. Thus, developing a blockchain agnostic protocol or blockchain will only help normalize the decentralizing technology.

Interoperability Wheels Are in Motion

Existing leading smart contract ecosystems lack the innovative energy to explore more ways to improve their network, as they already focus on scalability. Blockchains like Solana are dabbling with the idea of cross-chain transactions by creating a communication process; however, they are limited. Interoperability entails complete heterogeneity from current developments, facilitating a bidirectional communication order between two autonomous blockchain codes.

In a survey on blockchain interoperability, Rafael Belchior, Ph.D., Researcher at Universidade de Lisboa, illustrates the existence of multiple DLT approaches to interoperability. Belchior notes that “different categories” approach interoperability differently, but all strive for the same end goal of creating blockchain data congruence.

Most of the developments undertaken are between two blockchains; each project has its own approaches, whether it is Wanchain’s non-custodial cross-chain layout connected with Avalanche C-Chain or Solana’s wormhole.

Dr. Belchior identifies two top market capitalization projects, Cosmos and Polkadot, that provide the level of innovation of security needed to achieve blockchain to blockchain connectivity. The downside – users are limited to “specific implementations” and require bridges to facilitate further connectivity.

Progress is steady, and immersion into a new Web 3.0 era will require complete interoperability for digital societies to alter their behaviors. Stefan Schulte argued that the current blockchain space is fragmented. For blockchain to be widely accepted, data should be permissionless, without requiring interactions to be linear on a similar basis but ratified across all existing blockchains.

On The Flipside

  • Innovation in the field currently strives for smart contract platform hegemony, progressing the scalability narrative.
  • Both scalability and interoperability are essential elements to create a seamlessly operating decentralized machine.
  • All blockchain projects are absorbed in their own ability to create the “one” global ecosystem.

The Future is Agnostic

The internet succeeded because it unlocked interoperability and utilizing it is a seamless process. However, distributed ledger technology has to generate a singular ecosystem with set standards that preserves online security afferent to blockchain while connecting all existing ecosystems. The rigidity of the blockchain ecosystem is attributed to the lack of network trust, as innovation in the field brings bad actors.

A process of prioritizing developments is needed; however, for blockchain to achieve global status and be deemed applicable, it needs to meet the current needs and behaviors of the digital society. Quant’s Overledger 2.05 is a step towards increasing interoperability as it bridges stablecoins, NFTs, and DeFi ecosystems to blockchain payments.

The industry is limited to current innovations. The future of blockchain is not bridged; it is data agnostic and will be successful only when it can mimic or enhance the internet’s digital experience.

Why You Should Care?

Existing developments offer a glimpse into how society’s standards can change if payments and other digital interactions, whether financial or personal, can impact our way of living. However, full blockchain adoption and immersion will be completed only when ecosystems can interact with each other.

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The Push For Blockchain Interoperability
 

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Alex Choi Sep 18, 2021 11:38AM ET
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