Blockchain has turned out as a hot topic from last decade. From Blockchain mining to Blockchain procedure, the topic has been in search for significant times.
Reference Blog: Blockchain as an emerging technology
Blockchain basically refers to a database kind of operation. Blockchain has a significant role in cryptocurrencies and their mining. To make a crypto available in the market, users and miners have to solve a mathematical equation, once the equation is solved by an individual miner, it is then validated and verified by other registered miners.
After validation and verification, the data, and transactions are stored in a database structure called Blockchain. Several other blockchains from different networks connect and work with each other. The first registered transaction acts as a starting node for establishing further connections.
From the above definition and statement, it is clear that there is a connection between several blockchains of a network. And obviously where there is a connection, there is some communication. In simple words, these blockchains are communicating with each other in the network.
Now, the question is how blockchain communicates? Or, what is the process of blockchain communication? Obviously, blockchains are not using words or gestures like us. There must be something technical.
Well, the answer is blockchain interoperability. Let us understand all important terms and processes related to blockchain interoperability. In this blog, we will read about Blockchain Interoperability in 2021 and 2022.
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What is Blockchain Interoperability?
The term Blockchain interoperability consists of two specific words, blockchain and interoperability. The meaning of the term Blockchain is already described in the introduction of this blog.
Now comes interoperability, what does it mean? In general terms, interoperability may be defined as execution of several operations among the same kinds. Blockchain interoperability is defined as the process of operations between two or more blockchains. In layman language, blockchain interoperability is the communication mechanism between two or more blockchains.
Technically, blockchain interoperability may be defined as the ability to see, access, and share information across different blockchains or blockchain networks. Many blockchain projects want to implement interoperability to make their process easier and more transparent. Also, implementation of this process will increase the communication rate of their blockchains.
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Each blockchain stores different kinds of data and transactions. Interoperability enables blockchain to share and access their data and interoperate with one another. The ability through which blockchains share and communicate with each other is called blockchain interoperability.
Importance of interoperability in blockchain
Blockchains are important for miners and investors. People rely on blockchains as a source of income and a source of transparent transactions. They are meant for secure and safe transactions. Blockchain mining is important for validating a particular transaction.
And to ease the above process blockchain interoperability is essential. The bigger the network, the bigger the benefit. Blockchain interoperability increases the network of blockchains, just making the process more productive.
Though, interoperability of blockchain has not fully been implemented yet. Also, there are few weak sections in the process. But as a future perspective, blockchain interoperability will have a key role in cryptocurrencies, blockchain mining, and trading markets.
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Why is blockchain interoperability integral?
Let us try to understand this question by a casual example. When we transfer physical goods across the globe, what do we focus on the most? Obviously, the smoothness in transportation.
Same thing is required while digital transfer or sharing. The same ability is needed to move a digital asset from one blockchain to another. This process further requires liberty from new intermediaries and markets. Ensuring this freedom is tough and that’s why the process of blockchain interoperability is critical.
Solutions for executing Blockchain interoperability
The few important solutions or projects of blockchain interoperability are as follows.
Few of these solutions are open source and easily available for all the networks.
How do these solutions or projects work?
Networks such as Cosmos, Polkadot, Harmony have emerged as leading examples of blockchain interoperability. Several networks such as Ethereum have taken Cosmos as their ideal solutions.
Recently Cosmos has rolled out the Inter Blockchain Communication protocol. Similar protocol has been launched by Polkadot. These protocols ease inter-blockchain communication and inter chain messaging. Harmony bridges interoperability among different cryptocurrencies.
Several other networks are looking for the solutions to increase interoperability in their blockchains. Though it is a critical challenge in the field, solutions like Cosmos, Polkadot, and Harmony can be chosen.
Reference blog, Polkadot vs Cosmos, which one is better?
How does blockchain interoperability work?
By using above stated protocols and cross-chain transactions technologies, blockchain interoperability helps in sharing and accessing data between two or more blockchains with creating intermediate transactions or blockchains.
Which cryptocurrency is a leading name in the field of blockchain interoperability?
As stated above, several networks are still looking for ideal solutions for their purpose. Recently, Ripple is a leading project in cross-chain transactions and blockchain interoperability.
Serving as a key example in interoperability, Ripple has taken help from the banks, cryptocurrencies, and other forms of currencies around the world.
It is still in the early stage of its development but still provides several ways to its user for sharing and accessing data. It is also making access to digital assets across different blockchains easier.
Advantages of Blockchain Interoperability
Advantages of blockchain interoperability
Following are the important uses and advantages of blockchain interoperability.
Increases the success of blockchain technology
Blockchain technology works on sharing and integration. Interoperability increases the ease of sharing and integration of data, and thus strengthening blockchain technology. This further encourages blockchain transactions.
Enhances the future of emerging projects
Blockchain interoperability can help to increase the advent and success rate of existing and emerging projects of the field. Especially for the projects where the value chain is important like healthcare, finance, trade, aviation, etc.
By allowing blockchains to share their data with one another, interoperability has eased the process of cross-chain transactions.
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Blockchain interoperability has also improved multi-token transactional operations.
Privacy and security
Interoperability of blockchains is a safe and secure process. There are minute or no chances of frauds.
Why is blockchain interoperability essential in healthcare?
Blockchain interoperability plays a crucial role in healthcare as the value chain is more important in healthcare. It is a widely acknowledged fact that healthcare data transfer is hard and expensive.
Blockchain interoperability ensures the easy flow of data from one blockchain to another. Thus, helps in maintaining and organizing patients and research data more efficiently.
Disadvantages of blockchain interoperability
Following are the difficulties faced in the process of blockchain interoperability.
Reverse flow of blockchain is not possible
A blockchain registered on a network cannot go back to its original location. Thus, it is too essential to validate the data before submitting a starting node.
Interoperability is not possible between two different networks
Blockchain interoperability currently works for the different blockchains of the same network. For example, Ethereum and Ripple cannot exchange their data with each other. This drawback needs to be considered immediately for ensuring a good future of blockchain interoperability around the globe.
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The process of blockchain interoperability is highly restricted in nature. Though, this feature ensures safety while transferring data, but sometimes it becomes more complex and complicated for the users.
Blockchain technology has a bright future in different sectors of importance such as financial trade and healthcare. Interoperability of blockchains is essential to ensure sufficient output and profit from trade.
Not only profit, interoperability also helps in easing several intermediate processes. It also enhances database management procedures.
With few challenges, presently, blockchain interoperability is lagging its deserved status. Few changes are required on immediate scale, for example inter network interoperability of blockchains. Once these challenges are tackled, countless benefits can be earned from blockchain interoperability.