Blockchain Interoperability
Since blockchain technology often seeks to remove intermediaries, it is ironic that users cannot easily transfer value between blockchains, and generally have to use an intermediary. Take the example of someone holding Bitcoin and looking to transact on the Ethereum environment. The user would have to complete at least three steps: register with a cryptocurrency exchange, exchange BTC for ETH, and register on the Ethereum environment to use its functionality (for example, purchase gas or enter into smart contracts).
This is because most large public blockchains operate as standalone environments, disconnected from one another.
However, increased interoperability among blockchains is emerging as an important blockchain trend and will help blockchain technology reach its full potential.
What is Interoperability?
Interoperability is the ability to easily share information and transact across blockchain systems. In a fully interoperable environment, if a user from another blockchain sends you something on your blockchain, you will be able to read, comprehend, and interact with or respond to it with little effort.
There are three levels of interoperability:
- Foundational level:allows data exchange between systems, without the systems to interpret the data.
- Structural level:allows data exchange between systems with a defined structure or format where there is uniform movement of data. This level allows the information to be interpreted, but not interacted with or used.
- Semantic level: allows data exchange between systems in a manner that allows the data to be interpreted and used.
Sidechains
A sidechain is a blockchain mechanism that allows for a separate chain to be attached to the main blockchain, using a two-way peg. This enables the exchange of digital assets between the main blockchain and the sidechain.
Sidechains were originally developed to help users test their apps on smaller, more manageable environments before deploying them to the main blockchains. Sidechain functionality was a step toward interoperability.
Cosmos
The Tendermint team’s Cosmos Network project allows multiple blockchains to interact with one another. It is powered by the ‘Byzantine Fault-Tolerant Tendermint Protocol’. Independent blockchains on the Cosmos Network are called ‘zones’. Since zones are connected to one another via the central Cosmos Hub, users in one zone can interact with any other zone.
Cosmos uses Proof of Stake. Its native tokens are called ‘atoms’, and its rewards for validators are known as ‘photons’.
Individual blockchains such as Bitcoin and Ethereum are not currently included as zones of the Cosmos Network. Adding them as zones would enable interoperability among them.
Aion
Nuco’s Aion network allows multiple blockchains to exist, and to move value and logic across one another, eliminating the need for intermediaries. Aion will be open to private and public sector organizations. The Aion network will also allow users to customize their own private or public blockchains, and to choose issuance, governance, participation and consensus mechanisms.
ARK
ARK is an ecosystem of blockchains, linked via a ‘SmartBridge’ to enable interoperability. Businesses can create their own blockchains in the ARK Network. The SmartBridge acts as an intermediary between different blockchains, facilitating the transfer of data, functions, and coins through the network. ARK users can use the network to transact in multiple currencies and tokens, including ARK’s native currency.
ARK uses Delegated Proof of Stake. This consensus mechanism does not involve mining. Instead, users vote to choose a small group of validators to forge blocks and maintain the integrity of the system. Every token holder in the ARK network has a proportionate voice in the decision-making process. ARK currently supports Python, Ruby, Java, Elixir, and other languages.
As of this writing, creating a new block on the ARK network takes 8 seconds, which is incredibly fast. (For reference, creating a new block on the Bitcoin blockchain takes 10 minutes.)
ARK also offers Push Button blockchain deployment, which allows a user to create and run a blockchain with minimal effort. The newly created blockchain would be connected to the ARK ecosystem using the SmartBridge, and would have the same functionality as the main blockchain. The platform is therefore a user-friendly option for people looking to deploy their own interoperable blockchains.
Conclusion
Once interoperability among the major public blockchains is achieved, users on a major public blockchain will easily be able to transact on other major public blockchains. This will unlock diverse functionality, including in payments, smart contracts, and data storage. It remains to be see how each blockchain’s security protocols, mining mechanisms, and economics will interact and mesh with those of other blockchains. A truly interoperable blockchain infrastructure could become the new backbone of the internet.
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