The need for interoperability: the last component of a trustless ecosystem
Interoperability refers to the capacity of different systems being able to share data between themselves even if these systems span different industries and are built on different platforms.
As technology evolves and evermore disparate systems and apps are built, it is clear the need for interoperability is more important than ever as it impacts a huge range of issues across the social, economic and especially, technological landscapes. While this issue is of great importance across the whole spectrum of technology, it is particularly relevant in the world of Cryptocurrencies and blockchain technology.
As the underlying technology of not just Bitcoin, but all cryptocurrency projects, blockchains are a fantastic innovation and are proving to be a very disruptive technology. However, blockchains are in danger of becoming a victim of their own success. By the very nature of their design, a restrictive flaw is built into each blockchain, specifically, that they can only communicate with themselves and cannot communicate with other blockchains. They are NOT interoperable and are isolated from one another. No data between different blockchain services can be transferred. In addition, the larger a blockchain grows, the more likely it will suffer from bloat. This results in fewer transactions being broadcasted by that particular network and an increase of network transaction fees. This places limitations on what blockchain technology, as a whole, has the potential to achieve. Eventually this imperfection could lead to the stagnation of blockchain based projects.
If blockchains are to achieve their true potential and cross into the mainstream, then the ability of blockchain based technology systems and software applications to communicate and exchange data with each other via their respective Blockchains is vital. Broad, generic interoperability between blockchain services is required. Without inter-chain interoperability, blockchain-based services can only deliver services within the confines of the limited customer base on that particular blockchain. If a blockchain service wants a wider usage base, it may be forced to sacrifice the unique security properties of blockchains by delivering these services via a centralized entity as well as facing the aforementioned problems with chain bloat and the market-related pressure to build further features onto a single chain. Just as the internet connects computers around the world, an “internet of Blockchains.” is also desperately needed.
The Blocknet Protocol — An Internet of Blockchains
The Blocknet protocol is a true peer-to-peer protocol between nodes on different blockchains and enables the delivery of potentially any kind of digital service from a node on any blockchain to a node on any other Blockchain. Utilizing the Blocknet’s unique X Bridge system, the Blocknet protocol is a general-purpose infrastructure for inter-blockchain services and is designed to enable the emerging “token ecosystem.” The first app built on this protocol is a decentralized exchange that enables wallet to wallet trading. The Blocknet protocol also enables other inter-blockchain services such as monetised API consumption, and p2p digital service delivery.
To support inter-blockchain services, the Blocknet has three core components:
- A blockchain router
- A coin exchange protocol
- An inter-chain data transport
Focusing on the third component of interchain data transport, this aspect of the protocol allows for the transfer of data between different blockchains and it can be utilized for any number of applications or use cases and expands the potential to connect disparate blockchains and dapps together. NIX are already using the Blocknet protocol to build a system for private DEX (decentralized exchange) trading. You can read more about the wide variety of use cases the Blocknet enables here.
As interoperability becomes more important in the blockchain ecosystem, and as the need for inter-blockchain communication grows and evolves, Blocknet is in a prime position to facilitate and meet these needs. Further articles will explore potential interoperable use cases for Blocknet in more detail or you can read more about it in our Whitepaper.