Blockchain and Interoperability
Posted on 24-04-2022 05:30 PM
What is Blockchain?
Cosmos has a central vision of creating an “internet of blockchains”, and it seems this might not be a dream for long. The ceo of tendermint – the central developer behind cosmos – recently gave an exciting glance into the future, suggesting we’ll be seeing around 200 different chains connected through cosmos by 2022. 
A variety of blockchain networks host cryptocurrencies and decentralised finance (defi) applications. However these networks are discrete entities, and communication between them is not a simple process. The following articles provide a background to the issue of interoperability and the ways in which the problem is being dealt with. Have a read before testing yourself with our quiz below.
Decentralized ledger technology (dlt), in particular blockchain, is becoming ubiquitous in today's society. Just in the second quarter of 2021, centralized and decentralized exchanges had a volume of around $600 billion. Enterprises are adopting this technology, following the opportunity to expand to new businesses. However, they need to connect their existing systems and processes to blockchains securely and reliably. Blockchain interoperability (bi) is emerging as one of the crucial features of blockchain technology. Fueled by the need to eliminate data and value silos, they realize the necessary bridge between centralized and decentralized systems.
Blockchain interoperability refers to the ability of different blockchain protocols to become compatible with one another. As things currently stand, the blockchain industry is not interoperable. Instead, the industry is siloed into many different islands of blockchain technology. A project that builds on ethereum, for instance, can easily interact with other projects built on the ethereum platform, but cannot interact with projects built on neo, eos, tron, or any other smart contract platform. This effectively makes each smart contract platform a gated garden, where the projects built within are both locked in and forbidden from sharing data or value with any projects outside that particular environment.
What is Interoperability?
Today enterprise blockchain firm setl announced that it’s open-sourcing its core blockchain, as well as its blockchain interoperability solution portl. Setl counts citibank as a major investor and has several high profile clients. These include marketnode , the blockchain fixed income solution founded by the singapore exchange (sgx) and temasek, french fund distribution platform iznes, and commercial paper dlt central depositary id2s. The latter two have been in production for years.
Blockchain technology is increasingly being adopted by mainstream and crypto-native businesses alike — from defi to nfts, to peer-to-peer file sharing, supply chain consortia, gaming, and more. Because of a multitude of business use cases and varied application scenarios, different flavors of blockchains (including permissionless, permissioned, private) have emerged. Clearly, the proverbial elephant in the room is “blockchain interoperability”, i. E. , how can these different protocols connect to form a cohesive whole? the problem of blockchain interoperability essentially boils down to two categories of problems: crosschain asset transfers and crosschain function calls.
Intertrust: towards an efficient blockchain interoperability architecture with trusted services gang wang and mark nixon abstract: blockchain as a potentially disruptive technology can advance many different fields, e. G. , cryptocurrencies, supply chains, and the industrial internet of things. The next-generation blockchain ecosystem is expected to consist of various homogeneous and heterogeneous distributed ledgers. These ledger systems will inevitably require a certain level of proper cooperation of multiple blockchains to enrich advanced functionalities and enhance interoperable capabilities for future applications. The interoperability among blockchains will revolutionize current blockchain design principles, like the emergence of the internet. However, the development of cross-blockchain applications involves much complexity regarding the variety of underlying cross-blockchain communication.
Many things are so common that our brains often choose to ignore them. Such is the case with interoperability, not just of blockchains but of so many other technologies. To start with, let us take examples of some things that we’re familiar with: mobile phones, computers, and email. Emailing wouldn’t be half as efficient and impactful as it is today if only two email platforms built on two different infrastructures were not interoperable.
Blockchain Interoperability: Connecting Isolated Protocols
Sia and enterprise blockchain technology quant network have carried out successful testing of interoperability between multiple distributed ledger technology protocols. The companies achieved the goal by integrating quant network’s overledger technology and the siachain private blockchain infrastructure. The integration will help in connecting permissioned blockchain instances between siachain and other external networks. It will help in delivering cross-platform applications and services such as notarisation, payments and kyc.
Interconnecting existing blockchains is no easy task as the existing blockchains have no built-in features to share information with other networks. According to itransition , a texas-based software development company, interoperability can be achieved by two methods: open protocol and multi-chain framework. The first method includes the development of standardized open protocols that allow blockchains to communicate with each other without intermediaries or trust processes needed. Atomic swap is the best-known open protocol.
The Blockchain Interoperability Problem Explained
With the meteoric rise (and dramatic fall) of bitcoin, cryptocurrencies are now part of mainstream conversation. Blockchain, the underlying technology behind bitcoin, is being touted as the ultimate solution to sharing, security, and transparency problems – often compared to what the internet did for communications. But can blockchain solve interoperability in healthcare?.
Cosmos is pos (proof of stake) blockchain, which created to solve scalability and interoperability problems. Cosmos can help you create independent blockchains called “zones” and each zone can communicate to the hub and each other using ibc (inter-blockchain communication protocol architecture) and cosmos can communicate to other blockchains like ethereum and zcash by using " peg zones ".
Categorized: blockchain development | blockchain explained | open source on blockchain share this post: calls for interoperability began almost as soon as the second blockchain framework was built. Today there are permissioned blockchains (like the linux foundation’s hyperledger fabric) which are preferred for many enterprises solutions , public blockchains for cryptocurrencies, and emerging blockchain identity frameworks that hold great promise for streamlining transactions in nearly every industry.
“different categories of solutions approach the interoperability problem differently. Our paper firstly introduced public connectors in section 5. 1 and stressed their importance. Token exchange is arguably no longer the whole scope of blockchain interoperability. Instead, various interoperability approaches emerged in the last years, whereby many of them aimed at generalizing blockchain interoperability.
Blockchain Interoperability Within A Specific Protocol
Filed in episodes by se-radio on february 23, 2022 • 0 comments sergey gorbunov of axelar discusses blockchain interoperability, a technology that enables decentralized applications to work across multiple blockchain ecosystems. Host philip winston spoke with gorbunov about programmable blockchains, distributed vs. Centralized changes, the ethereum virtual machine, axelar’s cross-chain gateway protocol and cross-chain transfer protocol, security issues, delegated proof of stake, and other implementation details. This […].
As enterprises, large-scale corporations and startups are increasingly adopting blockchain solutions in their businesses; they realize that no blockchain protocol can exist or attain its optimal efficiency in complete exclusivity. Just imagine what would have been the efficiency of email services if it wasn’t feasible to send a mail from gmail to yahoo or outlook. Interoperability between multiple email ecosystems has made email services as efficient as it is today. The same phenomenon of interoperability powers the efficiency of operating systems also.
In recent years, distributed ledger technologies like blockchains have gained much popularity both within industry and research. Today, blockchains do not only act as the underlying technology for cryptocurrencies like bitcoin, but have also been identified as a potentially disruptive technology in many different fields, e. G. , supply chain tracking and healthcare. The widespread attention for blockchains has led to manifold research and development activities. As a result, today’s blockchain landscape is heavily fragmented, with different, incompatible technologies being available to potential users. Since interoperability between different blockchains is usually not foreseen in existing protocols and standards, functionalities like sending tokens from one participant to another, or invoking and executing smart contracts can only be carried out within a single blockchain.
Cross-chain, protocol ensures interoperability between blockchains, thus enabling the exchange of value as well as information between various networks. Complimented with the benefits of public decentralized chains, such protocols should lay the foundation for blockchain mass adoption and use cross blockchain compatibility, allows different blockchains to communicate with one another without the help of intermediaries. What this means is that blockchains sharing similar networks will be able to transfer value between each other.