Blockchain Interoperability: Is Wanchain The Internet of Blockchains?

14 min readMay 5, 2020

Blockchain interoperability, a topic that is increasingly becoming more relevant and important. In this article, I will explain why interoperability is essential for Blockchain technology. We will then go deeper into details about the main projects that focus on blockchain interoperability: Wanchain, Cosmos and Polkadot. Finally, we will compare these projects in order to determine the best candidate to become the “Internet of blockchains”.

Without further ado, let’s dive in and find out why interoperability is so important to Blockchain technology?

Blockchain and Interoperability, The Essential Partnership

Since the creation of the very first Blockchain, Bitcoin, the believers and pioneers of this new technology have been waiting for one thing: mass adoption. As it currently is, there are 1000s of blockchains. On the technical side of things you have vastly different consensus, governance structures, scalability, speed, cryptographic hash functions etc. On the business & community side, each blockchain caters to a different set of users. Each project has their own dApps, communities, partners & developer initiatives (to name a few).

When looking at all of this, you might wonder — how can these communities interact with each other? How can my friend Alice who has Bitcoin, send to Bob who only has Eth in an Ethereum address? — Well,by enabling blockchain interoperability you allow these communities to interact with each other. You allow Alice to send Bitcoin to Bob who only has Eth. Adoption is impossible if each blockchain network is isolated, and can only communicate in its own ecosystem. Currently, the majority of popular blockchains are heterogeneous (their technological architectures are very different), which makes communication between them almost impossible.

It’s a bit like a company’s intranet network that allows different units of the company to communicate with each other, but doesn’t allow this company to communicate with an external company. This is where the Internet came in and allowed external communications. Thus, the association of Interoperability and Blockchain can be described as a way that takes an isolated blockchain from the intranet to the Internet.

This possibility of communication between different blockchains is called blockchain interoperability. Currently, the only ways to exchange value between blockchains is either to do it peer-to-peer or to use an intermediary such as centralized exchange platforms. This goes against the main principle of blockchain creation which was to remove any intermediary while transferring value.

To fill this need, several projects specializing in blockchain interoperability have been launched. In this article, we will review the most advanced ones, we will talk about Wanchain, but also Cosmos, Polkadot, Icon and Aion. We will explore the interoperability of each project, then compare them from different angles and find out which project is more likely to become this famous Internet of Blockchains:

The race to become the internet of blockchains

Wanchain

Wanchain is currently developing a decentralized financial world which allows any blockchain integrated into the Wanchain network (whether it is a public, private or consortium blockchain) to communicate and transfer data and value to other blockchains on the network via private transactions . These transactions are based on ring signatures, the same algorithm used by private cryptocurrencies such as Monero. Wanchain is also a smart contract platform that allows development of blockchains and decentralized applications (dApps). However, the main topic of our article is blockchain interoperability, so let’s get started![2]

Wanchain’s interoperability is made possible by the unique system of Storeman Node which allows blockchains integrated into the network to interoperate. This system combines two crucial concepts that ensure the confidentiality, security and decentralization of any transaction in Wanchain’s network: Secure multiparty computation and Shamir’s secret sharing. However, before we go deeper into that, let’s first discover how Wanchain’s interoperability works:

Let’s say we want to make an Ethereum transaction: If you want to transfer Ether into the Wanchain network, the value you are going to transfer will be locked by a smart contract in an account in the Ethereum chain. An equivalent value of the wrapped ETH token (WETH) is then released in the Wanchain network. At this precise moment, you only own the mapping WETH token that you can use and exchange as you wish on the Wanchain network. When another user wants to convert their WETH tokens to ETH, the equivalent in locked ETH will be released, and the WETH tokens that he had in his possession will be burned.

It’s the same process if you want to make a cross-chain transaction with Bitcoin, EOS, ERC20 tokens, or any other cryptocurrency supported by the Wanchain network.

Now that you have a general idea about how this cross-chain transactions process works, let’s find out how Wanchain uses the two before-mentioned concepts to ensure that these transactions are secure, confidential and decentralized:

1- Secure multiparty computation

It is a way for multiple parties to perform a data computation for which each party is only aware of one piece of the puzzle. Let me provide you a simplified example!

The concept of secure multiparty computation

Let’s say that a university class students want to calculate their class average, but no student wants to reveal his grade to others. Then, a first student adds a number X (which can be any number) to his grade and he notes the result. Then, he passes it to the second student who adds his grade and passes the result to the third student who does the same, and so on. When all the students have added their grades, the computation will return to the very first student. This student will just subtract the number X that he has added. He will then obtain the global sum, without any student knowing another student’s grade.

Let’s get back to Wanchain now! This concept makes it possible to secure the private key of the account that is locked in its original chain (Ethereum account in our previous example). This is why Wanchain is using the Storeman nodes, each node will only have one part of the private key, the nodes will then carry out a secure multiparty computation to write a smart contract that locks the asset in its original chain.

2- Shamir’s secret sharing

We have seen how multiparty computation manages to secure the private key of the locked account, but — what happens if one of the storeman nodes goes offline, or worse, if it loses its part of the private key?

Don’t worry, Wanchain got you covered! This problem is solved through the second concept of Wanchain’s interoperability: Shamir’s secret sharing.

By using this cryptographic concept, Wanchain’s network does not need all the parties to reconstitute the private key. Thus, even if one or two storeman nodes lose access to the the private key, or go offline, it will still be possible to restore the private key and keep the network up and running. [3]

That’s not all! Wanchain launched its T-Bridge framework (Trusted-Bridge), becoming the first blockchain that allows interoperability between public blockchains and private blockchains.[4]

This framework is standardized and universal, because it allows for Public-Public, Private-Private, Public-Private blockchains communications and exchange of value and data.[4]

This revolutionary concept opens up the possibility of creating complex decentralized cross-chain applications where transactions on one chain can be triggered by events which occur on another chain.

This is what Wanchain’s interoperability consists of in general, the company is still working on the full decentralization of its mainnet and its cross-chain network. Jack Lu, founder and CEO of Wanchain, assured that the network will be fully decentralized in 2021. To be honest, we must admit that the project has come a long way since its launch in early 2018, the roadmap has been respected, which is currently quite rare in the Blockchain space!

Cosmos

The Cosmos network was created by Tendermint, a company that provides blockchains with the entire network part (Gossip protocol) and the consensus part using the Byzantine Fault-Tolerant (BFT) protocol. These two parts constitute the first module of the cosmos project: the Tendermint core, which is common to any blockchain built on the Cosmos network.[6]

The second module of the Cosmos project is the Cosmos SDK, a smart contract platform that allows to build blockchains and decentralized applications on top of Tendermint.

Well, that’s basically the structure of Cosmos. Now, let’s find out how the chains integrated into the Cosmos network can interoperate with each other.

Blockchain interoperability of the Cosmos network is made possible by the IBC protocol (Inter Blockchain communication), which will be launched later this year. It will allow interactions between the different blockchains of the Cosmos network. These blockchains will be connected as a “Hub and Zones” model, composed of a central blockchain that is called a Hub, and many blockchains built on it that are called Zones.[7]

These zones with a Tendermint core are all linked to the central hub and can communicate with it. They can also communicate with each other, however, this can only be done through the central hub. The Hub is therefore responsible for preserving the total quantity of each token across the different zones.

A Cosmos zone is an independent blockchain that cannot transfer more tokens than it has, but can receive tokens from other zones who have them.[6] Also, you should know that the Hub does not verify transactions executed in other zones, it is therefore the responsibility of users to send tokens only to the zones they trust.[10]

IBC protocol will allow to transfer assets and data between different blockchains, whether they are private or public.

How does it work?

Let’s take the example of blockchains A and B, blockchain A locks the quantity of tokens to be transferred and sends the proof to chain B. Once chain B verifies the proof, it mints its own representative tokens (like vouchers), which will later be destroyed to unlock the tokens on chain A. Thus, the value represented by a token can be transferred, but not the token itself.[7]

When applying this to the structure of the Cosmos network, this communication must go through the central hub (Cosmos Hub, for example). To make a transfer, chain A will have to trust not only the central hub, but also chain B.

What about the interoperability with blockchains that are not built on top of Tendermint, like Bitcoin or Ethereum?

Proof of Work (PoW) blockchains like Bitcoin or Ethereum blocks have a “probabilistic finality”. A validated block can be reinforced when the next bloc is produced, which can be a real issue when it comes to cross-chain transfers. Remember when chain A locked its tokens and sent the proof to chain B? If this transaction is not permanent, chain B will have produced a representative value which is not locked on chain A. It is therefore essential to ensure that Chaine A’s block is permanent in order to make the transfer possible.[7]

Cosmos hopes to solve this by implementing special zones or Peg-zones. These zones can set a certain number of blocks (a security threshold) in order to securely transfer value to the Cosmos ecosystem.[7] Also, the integration of Ethereum is planned to be implemented through the Ethermint project. However, nothing is yet clear about the exact mechanisms, which are not clearly explained in the Cosmos white paper.

Polkadot

Many crypto enthusiasts remember Polkadot, the project that raised $ 145 million during its ICO in 2017, and then we hardly heard about it. However, it seems that despite the repetitive delays in the launch of their mainnet, this time is the right one, it will be launched this year in 2020.

Regarding Polkadot’s blockchain interoperability, you should know that it is quite similar to Cosmos, it is based on the communication between the relay chain (similar to Cosmos Hub) and the parachains (Similar to Cosmos zones). Polkadot also hopes to use the same mecanism of Peg Zones to allow the Polkadot network to communicate with external blockchains (such as Bitcoin and Ethereum).

Just like the Cosmos network, Polkadot’s parachains have their own rules, consensus and block producers called collators. However, these blocks need to be finalized by the validators of the central relay chain, then, these validators will update the entire network. This means that the validators have the final say. To avoid any validator rejecting continually, for some reason, the blocks of a particular parachain, Polkadot worked on reducing this possibility by shuffling validators to validate blocks randomly.

Also, Polkadot plans to have another type of validators called “Fishermen”, who are like bounty hunters, their role is to constantly check validators and collators for any malicious activity.[11]

Last but not least, in the Polkadot network, parachains will benefit from the shared security of the network. Having uniform levels of security facilitates Blockchain interoperability. The different chains can easily trust each other when they have the same level of security.[11]

Icon and Aion

Icon and Aion are quite famous in the blockchain space. However, I will only quote them in this article, since blockchain interoperability seems no longer a priority to their projects. Aion hasn’t given any update about it for over a year, while Icon project seems to be more focused on the large network it has established with the government and the enterprise in South Korea.

Blockchain Interoperability: Wanchain vs Cosmos vs Polkadot

Project’s Progress and Development

Whether it’s Wanchain, Cosmos or Polkadot; all three projects completed their ICOs in 2017. However, if the projects started almost at the same time, their development in the following months and years were different. Development is a very important topic in the blockchain space. We have known a lot of projects that were interesting in theory, but in practise, they failed to deliver.

Blockchain interoperability has always been Wanchain’s top priority, they worked on it since project’s early days, and started to deliver a few months after market’s launch with the integration of Bitcoin, then Ethereum’s and a bunch of ERC20 tokens, as well as other major cryptocurrencies like USDT. Finally, in its last update (Wanchain 4.0), the project announced the integration of EOS blockchain and the implementation of the T-Bridge framework. Wanchain’s next challenge is to fully decentralize its network, this step has already been started with a few storeman nodes. The full decentralization is planned to be finalized in 2021.

Regarding Cosmos, the project was launched on the market in early 2019. Its development seems to be more focused on the Cosmos SDK platform. As for blockchain interoperability, the IBC protocol has not yet been implemented. Scheduled for this year 2020, it will first only concern the interoperability of chains built on top of Cosmos platform. As for external heterogenous blockchains like Ethereum or Bitcoin, tests are underway, but integration timelines have not been disclosed yet.

Polkadot is undoubtedly the project that delivered the least out of the three, the launch of their mainnet is only planned for this year (2020). As for interoperability, there are no precise timelines regarding its implementation.

So when it comes to the project’s progress and development, it’s clear that Wanchain is one step ahead of its competitors. The Wanchain network has proven that it is able to integrate very heterogeneous blockchains like Bitcoin, Ethereum and EOS. Its value and data transfer feature is already functional. On this topic, Cosmos and Polkadot’s interoperability has yet to be proven, their protocols for chains built on their networks have not yet been launched, and we do not know much about the integration of external blockchains.

Trust and ease of communication between chains

Security is a very important topic in this comparison, in the Cosmos model, each zone has to ensure its own security using its own means, consensus and validators. On the other hand, Wanchain and Polkadot opted for a shared security model. Thus, if the mother chain has an enhanced security, then all the chains of the network will benefit from it.

As of blockchain interoperability, it is obvious that the shared security model already used by Wanchain and planned to be used by Polkadot is more practical. Having uniform levels of security makes data and value exchange much easier, since the different chains can easily trust each other. On the other hand, when the level of security is different between chains as in the Cosmos network, the blockchain A which receives tokens from Blockchain B, will have to trust not only the central Hub but also blockchain B, which complicates the interoperability between chains.

Transactions

The number of transactions that a blockchain network can handle depends mainly on the parameters of the consensus and on the number of nodes. Each of the three blockchains concerned by this comparison can manage thousands of transactions per second. However, what sets blockchain interoperability projects apart is their scalability. In fact, the more chains are integrated to the network, the bigger is the number of transactions that can be handled.

However, the difference between these three projects is that, unlike Polkadot and Cosmos, Wanchain is the only project that allows to use private transactions based on ring signatures. It is also the only project that has an up and running cross-chain transactions functionality. This functionality is accessible on the Wan Wallet wallet, it allows easy carrying out cross-chain transactions.

For more details, you can refer to this step-by-step guide on how to make a cross-chain transaction on the Wan wallet.

Project’s vision

The last point I wanted to mention in this comparison is the difference of visions between the three projects. Even if the three are specialized in blockchain interoperability, this does not necessarily mean that they have the same vision. Indeed, Wanchain aims to link and facilitate communication between the different blockchains as much as possible. The project does not seek to replace or outperform Bitcoin or Ethereum. On the contrary, it understands the added value of each of the already existing blockchains, and the advantages of this diversity, and therefore wants to allow them to communicate and exchange more easily, which will undoubtedly contribute to the development of the whole blockchain space.

On the other hand, Cosmos and Polkadot are clearly trying to replace Ethereum, and become the epicenter of the blockchain space. This would centralize a space whose greatest strength is its decentralization. Definitely not the biggest dream of blockchain enthusiasts!

Final Thoughts

Blockchain interoperability is a necessary step for mass adoption. The blockchain technology can be applied, and can contribute to the development of many fields, these different applications will only make sense if they are linked together, and this is exactly what blockchain interoperability aims to achieve, opening up infinite possibilities of exchanges and communications between companies and professionals.

In this article, we’ve talked in detail about Wanchain, Cosmos and Polkadot. Then, we compared their different blockchain interoperability mechanisms. Wanchain uses the storeman node system which combines two cryptographic concepts that ensure security and confidentiality of network’s transactions: secure multiparty computation and Shamir’s secret sharing. Cosmos uses the IBC protocol (Inter Blockchain Communication protocol) to allow communication between a central hub and the chains linked to the network, also called Zones. At Polkadot, the concept is quite similar to that of Cosmos, it allows communication between the relay chain and the parachains of Polkadot’s network.

However, Wanchain stands out by being the only network that is already functional and that allows communication and exchange of value and data between public and private blockchains through storeman nodes and the T-Bridge framework. It is also the only network that allows the use of private transactions. It already allows interoperability between heterogeneous blockchains, like Bitcoin, Ethereum and EOS, and many other blockchains are yet to be integrated in the near future. On the other hand, Cosmos and Polkadot didn’t launch their interoperability protocols yet, which seem to focus more on blockchains built on top of their platforms than on heterogeneous external blockchains.

Also, to secure the network, Wanchain uses a shared security model allowing easier communication between chains. The Cosmos model lets the chains ensure their own security, which may cause trust problems between chains of different security levels.

As you can see, becoming the internet of blockchains requires not only the use of highly developed technological concepts, but also, a know-how and a hard work to deliver and convert these concepts into real functionalities. In this race, Wanchain is obviously the most advanced project, and the closest one to combine blockchain and interoperability.

Sources:

The original French version: Intéropérabilité Blockchain: Wanchain sera-t-il l’internet des blockchains?