“Cross-chain” actually solves the problem of information islands in the blockchain and enhances the interoperability of the blockchain.That is, the ability to communicate with each other without barriers.
Why is the interoperability of the blockchain so important? In addition to Cosmos and Polkadot, what other projects are solving blockchain interoperability issues? What are their solutions?
What is blockchain interoperability?
The “interoperability” of the blockchain means that different blockchain networks can communicate with each other and share information without restriction.
It has been more than ten years since the birth of the first blockchain network (Bitcoin). So far, blockchain technology has been known to the mainstream. From agriculture, real estate to healthcare, and voting, a large number of companies and state institutions have at least considered the benefits of using blockchain technology in these industries.
Because of this, dozens or even hundreds of new projects appear every year, and these projects compete with each other to become the “best” blockchain. Under normal circumstances, these projects will emphasize that their product market is mature, safer and more scalable than competitors’ products.
Regardless of whether the advantages they claim are true or not, these projects are isolated and non-interconnected blockchains, with different ecosystems, hashing algorithms, consensus mechanisms, and communities. One blockchain cannot understand the information that may exist on another block chain.
For example, the Bitcoin blockchain is completely independent of the Ethereum blockchain, so the Bitcoin blockchain will not know any information recorded on the Ethereum blockchain, and vice versa. Therefore, we would say that although there are so many blockchain projects and they all belong to the same industry, these projects are isolated and isolated from each other.
ConsenSys, which is developing around Ethereum, described this phenomenon in a report as the “Balkanization” of the encryption industry.Because it involves “under competition and commercial pressure, these blockchain networks cannot be interconnected and isolated from each other.” .
Conversely, the interoperability of blockchains is the ability to seamlessly exchange data between different blockchains as if there were no boundaries.
Why is blockchain interoperability important?
The interoperability of the blockchain makes the large-scale application of the blockchain possible and will promote the further development of the entire industry.
Due to the fierce competition in the blockchain industry, some projects tend to invest a lot of energy in catching up with their competitors on certain indicators instead of focusing on the underlying infrastructure construction.
The competition in scalability is a particularly representative example. The Bitcoin blockchain can only process up to 7 transactions per second, and its performance is low. Many blockchain projects just wanted to surpass Bitcoin at the beginning. Now their publicly declared TPS is as high as 40,000.
In contrast, the performance of the Visa network is approximately 24,000 TPS, although it only needs to process approximately 1,700 transactions per second. Any blockchain, even Bitcoin, is far less used than Visa. Therefore, 40,000 TPS is a bit exaggerated.
If the entire infrastructure of the blockchain does not have interoperability and security, no matter how scalable it is, no company will want to use blockchain technology to solve related payment services.If it remains isolated, it will not be able to be used worldwide. In contrast, bank cards such as Visa, MasterCard and American Express are “interoperable” and can be operated on merchants and ATMs all over the world.
Similarly, the Internet also allows many databases to be accessed and modified through API interfaces.If the Internet does not have “interoperability”, it cannot grow into a truly global and easy-to-use network.The same applies to blockchain. In order to gain mainstream attention, blockchain projects must show that they can work together seamlessly.
Give examples of the importance of blockchain interoperability
Let’s take a medical example to illustrate the importance of blockchain interoperability.
Let us first imagine that, assuming that the blockchain has been adopted on a large scale in this world, every company uses the blockchain to store data. Now, the following situation has occurred:
There is a critically ill patient who needs to be hospitalized for treatment. When he was transported by ambulance to the hospital, the hospital needs the medical records of the local clinic where the patient has been treated in order to carry out the best treatment plan.
However, unfortunately, this clinic uses another kind of blockchain network, which is incompatible with the blockchain network of this hospital. Therefore, the hospital cannot access the patient’s files. At the same time, the clock is ticking, and every second is crucial.
Fortunately, this will never happen: if the blockchain network is isolated, the hospital will not choose to rely on the blockchain. This also applies to other industries such as real estate, auditing, and logistics.
If the blockchain does not have “interoperability”, it cannot be adopted on a large scale.
How to achieve blockchain interoperability?
There are many solutions dedicated to solving blockchain interoperability, and each is different, including cross-chain, side-chain, proxy, atomic swap and so on.
Linking existing blockchain networks to each other is not easy. As ConsenSys said in the report: “Commercialization promotes competition and innovation, and incentivizes developers and entrepreneurs to build systems that are most suitable for their customers.”Therefore, open source and open interoperability are often overlooked, and most blockchains do not have built-in functions to support interoperability.
However, many blockchain projects have begun to focus on solving the interoperability problems of blockchains, and they have adopted different methods. Among these projects, the following 5 projects are representative:
Polkadot is a project that focuses on multi-chain or cross-chain technology. Basically, Polkadot allows different blockchains to be inserted into the larger, standardized Polkadot ecosystem. Its founder is Gavin Wood, the former co-founder of Ethereum.
Technically speaking, Polkadot consists of a series of parachains (parachains process transactions and transfer their results to the original blockchain), relay chains (that is, the central component that connects parachains and ensures their security), and It is composed of a transfer bridge connecting Polkadot to an external blockchain.
Cosmos is also the main cross-chain project. Specifically, it uses the Inter-Blockchain Communication Protocol (IBC) to establish the interoperability of the blockchain, which is similar to the Internet’s TCP/IP communication protocol.
Since many previous blockchain networks (such as Bitcoin) do not support IBC, Cosmos uses “Peg Zones” to connect these blockchains to the Cosmos Hub, and allows these blockchains to communicate with each other through standardized languages.
Chainlink is a decentralized oracle service. It can retrieve data from the off-chain API and put it on the blockchain. In other words, Chainlink is a bridge between the blockchain and all other offline infrastructure: nodes receive real-world data and transmit it to the blockchain through the network.
Currently, Chainlink is cooperating with the SWIFT system used by most banks around the world.
Unlike Polkadot and Cosmos, Wanchain uses different protocols to facilitate communication between other unconnected blockchains. Therefore, Wanchain does not deploy Peg Zones or multiple parachains, but creates so-called “anchor tokens” that can be traded with tokens on other blockchains.
For example, to transfer 10 ETH to the Bitcoin blockchain, Wanchain first uses a smart contract to lock the 10 ETH on the Ethereum blockchain, and then generates 10 WETH on the Wanchain blockchain, anchoring the lock to the smart contract That 10ETH.This 10WETH can be traded with the Bitcoin anchor coin WBTC on Wanchain, and these WBTC can be exchanged with BTC locked in the Bitcoin blockchain.
Unlike the above four projects, Quant is not a blockchain. Quant uses the Overledger protocol, which is a layer that runs on the existing blockchain.
On Overledger, developers can create MApps (similar to DApps that can use multiple blockchains at the same time) through “three lines of code” without any additional infrastructure.
This provides more options for blockchain projects. For example, MApp can rely on the Ethereum blockchain for data storage while using the BCH blockchain for value transfer.
It should be noted that there are many blockchain projects dedicated to solving the problem of blockchain interoperability, and the 5 projects listed above are only a small part of them. As for the success of these projects, it remains to be tested by time.
Does the blockchain realize interoperability now?
The answer is not yet, at least not yet implemented.
Cryptocurrency trading platform is still a powerful medium to solve the interoperability of blockchain.If someone needs to convert 10ETH into BTC, he will probably choose to go to the trading platform eventually. At present, the trading platform is the most popular and relatively convenient method. However, the trading platform also has its shortcomings, such as security.
Therefore, although many projects have been working on solving blockchain interoperability, the current blockchain network is still basically isolated.
However, just as the blockchain is still in the early stages of development, these projects are also in the early stages of development. To completely solve the interoperability of the blockchain, it will not be completed in two or three days, but a long and protracted battle.