Blockchain Interoperability and Bridges | How it Works?


Deepak Prasad

BlockChain

Getting started with Blockchain Interoperability

The widespread adoption of blockchain has been at an all-time high, with its tentacle of use cases touching various essential human industries such as finance, healthcare, and others. Blockchain success and level of adoption by all strata of the human race has sparked different opinions and curiosity, leading to the birth of numerous methods and development like no others in the blockchain ecosystem.

Blockchain started with bitcoin as its flagship coin, but the progress and usability achieved by bitcoin have ushered in clusters of networks built to follow the bitcoin direction. Over the years, we have seen the emergence of Ethereum, Solana, Arbitrum, Cardano, and many other incompatible networks that have given blockchain enthusiasts many ponds to fish. The different modes of operations, consensus models, algorithms or mechanisms each node uses to validate transaction, governance structure, native asset, and utility between various blockchain networks have necessitated the emergence of various models of mechanisms that will facilitate their interactions.

 

Blockchain interoperability is the innovative crafted method that allows two or more independent blockchains to communicate effectively, for example, in your everyday transaction where you transfer BTC to your ETH wallet (BTC to ERC-20). The chief enabler of this system are the set of bridges that allows seamless access from one blockchain to the other with their array of functionalities and dynamism. The correlation between blockchain interoperability and bridges can be regarded as a form of symbiotic relationship between two independent entities.

 

Importance of blockchain Interoperability

It is well-known that the key to human existence is centered around interaction. This sums up the importance of interoperability between blockchain networks. The alpha status of blockchain has made it a value-laden ecosystem that everyone loves to have a taste. Interoperability is a driver that oversees the well sought after value sharing equilibrium that sees to the advancement and growth of the blockchain industry as a whole. As a revolutionary and all-inclusive network, there is an influx of individual and enterprise-grade adoption within the technology. The possibility of interoperability enables the full-scale enjoyment of the various opportunities each blockchain network has to offer. For instance, institutional opportunities within decentralized finance (Defi) include asset trading, yield farming, asset lending, and others within multiple blockchain networks. From the business perspective, interoperability serves as the medium of connection between businesses and blockchain networks, bringing benefits such as increased trust, visibility, speed, and cost reduction.

The importance of blockchain interoperability transcends to the more technical and creative realm of the blockchain ecosystem with the intelligent integration of interoperability by developers in their pursuit and development of various network designs, such as industry-grade compatible protocol that allows the transfer of data from one blockchain to another, there is also the advantage of a token standard that serves as a customizable template for the future advancement of the existing and creation of a new crypto asset that will be compatible with all blockchain network. Lastly, the development of decentralized interoperability-focused applications will spearhead the ease of usage and combat any form of intimidating user experience and interactions every new entrant into the blockchain and crypto ecosystem might encounter.

 

How bridges enable Blockchain Interoperability

Blockchain bridges can be viewed as the active mechanism of the blockchain interoperability. The work of a blockchain bridge can be equated to what a physical bridge does (the connector of two different ecosystems and the enabler of interaction between them).

The blockchain ecosystem consists of various sets of nodes that interact with one another in an ultra-diverse environment to achieve the goal of validation, management, data exchange, and storage of blockchain and financial transactions. The growing advancement in blockchain networks’ mode of operation and contemporary development of distinct consensus models to battle the teething blockchain trilemma and achieve the three-star usage of all blockchain fundamentals (scalability, security, and decentralization), all this independent approach to blockchain advancement and solutions to various challenges has created a barrier between blockchain networks which highlights the importance of bridges to blockchain interoperability.

The development of various blockchain networks came to being through the crafty deployment of smart contracts, tokens, and applications through different codes and languages. Also, the increasing number of new and existing users that would use these network reinforce the need for a bridge that will serve as the medium of interconnection between different blockchain networks, which play well for blockchain interoperability, advancement, and ease of usage by individuals and industries.

To contextualize these, Imagine two blockchain networks: Ethereum and Solana. Ethereum users may witness poor transaction speeds and excessive gas fees in times of heavy traffic and congestion. To benefit from Avalanche’s quick transaction speeds, increased throughput, and cheaper costs, users may transfer their token on Ethereum (ERC-20 or ERC-721) over a bridge to the Solana network.

Users using the bridge, in this case, benefit from both blockchains. On the one hand, it alleviates some of Ethereum’s scalability difficulties by shifting network traffic away from Ethereum to other, less crowded blockchains.

On the other hand, the associated blockchain is exposed to the Ethereum community. Users may ultimately benefit from each ecosystem’s advantages once a bridge connects several blockchain ecosystems.

 

Top Blockchain Interoperability Projects

The interconnectedness of blockchain networks has made it a shiny gem among other revolutionary technology. The poise, free flow of information, extensive usability., scalability, security, decentralization, and other benefits of blockchain to the human race can be placed at the same level of importance as world stability and globalization. The quest for interoperability by numerous networks has been at the upward trajectory over the past couple of years since the importance of frictionless transactions between two blockchains has become apparent. Thus, the developmental strides of these networks are still at the early stage.

 

1. Cronos

Cronos is widely regarded as the mother of interoperable blockchain with their edgy layer 1 infrastructural network, which places them above most of their leading contemporaries like Ethereum, Avalanche, and others. As a top-level blockchain network, Cronos has a full fledge Dapps (decentralized applications), NFT, and blockchain-based games.

Cronos blockchain makes use of highly scalable “Ethermint” for its elite compatibility and ease of communication with Ethereum chains and other EVM. Additionally, Cronos is a frictionless supporter of inter-blockchain communication that forms the fundamentals of interoperability which has been widespread among networks like Terra, Crypto.org, Juno, Cosmos, and others.

Crono’s two-pronged utility is advantageous to their users because of its compatibility with cosmos-based blockchains and EVM. In context, Cronos-based decentralized apps (Dapps) have the chance to transact and benefit from the Ethereum network liquidity while still maintaining their relationship with the cosmos network community. Also, Crono’s advancement in blockchain interoperability development has led to the ground-breaking development of an interoperable mechanism that supports the transfer of NFT across inter-blockchain communication protocol-supported blockchain networks, as well as the free flow of interaction with smart contracts.

 

2. Polkadot

In the drive to steal a march at the advancement of blockchain interoperability, the Polkadot network built an ecosystem of highly interoperable blockchain networks. This is achieved with a central consensus system where Polkadot serves as the chief relay chain that connects leagues of blockchain networks (Parachain).

Polkadot based its ingenuity on the customizable pattern of its substrate framework, whereby developers can create and tweak their network to design applications of their choice. With more than 25 parachains working on the Polkadot network, each project has a separate blockchain governed by its modalities to define the best for their applications. Polkadot serves as the relay chain that acts as the key player and connector in the consensus mechanism where transactions are settled among the parachains, such as moonbeam, clover, parallel finance, and others.

Improved transaction speed, security, and hitch-free cross-chain interoperability are the key benefits of each network, and individual users stand to enjoy using Polkadot parachains.

 

3. Quant

This network is regarded as the oldest among blockchain interoperability projects. This network was launched in 2018 with the sole purpose of connecting the blockchain ecosystem. Quant has since then been among the frontiers of interoperability projects with the help of a technology called Overledger DL Gateway that connects all forms of decentralized protocols.

Quant gateway is an enterprise-grade system that allows developers to access and connect multiple ledgers to different blockchain networks through an API-based gateway. Additionally, quant API-based gateway also allows the creation of multi-DLT smart contracts (MAAPS) that run on multiple blockchains simultaneously by providing possibilities of features that are impossible on the mono style. There is also the creation of multi-ledger crypto tokens that can be transferred among various blockchains; this digital asset provides numerous utilities such as stablecoins, vouchers, loyalty bonuses, and federal reserves currency, among others.

 

Conclusion

The intricate nature and the essential role that blockchain technology stands to play in all major sectors further reinforce the importance of interoperability to ensure the ease of transaction between various networks, sufficient outputs, and enhanced database management procedures.

Although blockchain interoperability is still at the early stage and embroiled in numerous challenges that have impeded its immediate scale, the success achieved by various projects can never be underestimated because, through their exploits, we have seen the potential and benefits of an interoperable blockchain ecosystem for individuals and businesses.

 

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Deepak Prasad

He is the founder of GoLinuxCloud and brings over a decade of expertise in Linux, Python, Go, Laravel, DevOps, Kubernetes, Git, Shell scripting, OpenShift, AWS, Networking, and Security. With extensive experience, he excels in various domains, from development to DevOps, Networking, and Security, ensuring robust and efficient solutions for diverse projects. You can reach out to him on his LinkedIn profile or join on Facebook page.

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