The need of the hour — Blockchain Interoperability
In the recent pandemic times of Covid-19, blockchain emerged as a solution provider especially to the healthcare and the insurance sector. In China, itself close to 20 blockchain projects were launched and several in the other parts of the world including the USA and Europe.
Now when blockchain is reaching the stage of mass adoption, interoperability becomes more important than ever. Let’s understand why is it important with an example: Let’s say a person needs to be hospitalized while he was travelling for work to another town. The doctor needs to know about his medical history before operating him. His medical records which are stored on a blockchain is not compatible with the hospital’s ledger. The hospital is unable to get access to the patients’ medical records which is making them lose critical time.
The example is good enough for us all to understand the gravity of the situation and how isolated blockchains can affect not only healthcare but other industries like insurance, real estate, shipping and logistics.
Benefits of blockchain interoperability:
· Ease in information transfer
· Smooth execution of Smart contracts
· Collaboration and partnerships between the blockchain ecosystem
· For Blockchain developers- they wouldn’t need to learn about every blockchain ecosystem
Challenges for Blockchain Interoperability
Blockchain developers often develop the code to suit their purpose ignoring the standards set by the makers. However, this leads to troubles with interoperability and communication. Even if there is a standard system in place, the current blockchains in operation have different consensus models, smart contracts functionalities, as well as transaction processes.
Efforts have already been started to put a system in place, this year in January Ethereum Enterprise Alliance developed a standard from scratch. The standardization will help the Ethereum forks to become interoperable with each other.
IBM and Microsoft are also following an existing standard set in place by the GS1 to develop blockchains which are interoperable. As of now, we can divide the blockchain interoperability endeavours into two categories:
Open protocols: Open Protocols: standardized protocols like we have discussed above which can help blockchain to communicate with each other.
Multi-chain frameworks: Often mention as the ‘internet of blockchain’, multi-chain frameworks are a little more complicated than the open protocols. These blockchains can be a part of a standardized blockchain ecosystem and will be able to transfer the information as well as the value just by plugging into the framework.
Working on Interoperable blockchains
Interoperability across blockchains isn’t just a cosmetic feature that the enterprises feel the need of, it is a vital aspect that can affect blockchain adoption in times to come. Big Techs like IBM realizes this and have started working to drive it forward. Like mentioned above IBM has even collaborated with Microsoft for this.
Experts suggest a few aspects that must be taken care of in order to build these decentralized ledgers:
- Work towards achieving interoperability while the mindset of working in synergies and not taking the business/customers from each other.
- Have the long-term vision in mind like a blockchain ecosystem of interoperability in the very early stages of developing a blockchain
- Develop API gateways with other blockchain platforms
- Explore joint collaboration on government-led projects to bring more developers and partners into a solution
- More consortiums can be developed to work on cross-chain solutions and make the blockchain experience in industries more seamless.
