The Framework Of Blockchain Interoperability
“ blockchain Interoperability is the method of operation that sponsors the communication between various blockchains and how they can share digital resources, and data.” Also, their capability to work effectively which in turn gives the users full access to the services Blockchain technology has to offer “
In recent times, we have witnessed a huge influx in the Conception of new blockchain scaling solutions. With all other projects leveraging to build upon the Limitations of their counterparts, the question remains how all these projects can bridge with one another to deliver a seamless and cohesive service to the users?
To fully understand blockchain interoperability, You will have to read till the end.
What You’ll Learn
This article would aid your understanding of the following subjects;
- What is Blockchain Interoperability?
- What is Cross-Chain Protocol?
- What is a Multichain Technology?
- Blockchain Interoperability Framework
- Challenges of Blockchain Interoperability
- Interoperability Scaling Solutions; Cosmos and Polkadot
- The Future of interoperability of blockchain.
What is Blockchain Interoperability?
The interoperability of blockchains can be expounded or Interpreted as the methods of operation that sponsor the communication of various blockchains in terms of, sharing digital resources, and data. Also, their capability to work effectively Is a fundamental requirement to harness the full potential of this technology
What is a Cross Chain Protocol?
The cross-chain protocol paves the way for data sharing across many blockchain networks and catalyzes interoperability between these blockchain networks. Cross Chain protocols in blockchain are projects that enable users to interact amongst various blockchains without the need for intermediaries.
Due to differences in composition and programming, it is difficult for BTC to interact with the Ethereum blockchain as they are both on segregated blockchains.
So how do we then bridge them together to give users the optimal service blockchain technology can provide?
Cross-chain protocols help to bridge separate blockchains without the need for a third-party exchange.
What is a Multichain Technology?
Multichain technology takes the stance that interactions between separate blockchains should not be subjected to the arms of a bridged protocol.
Multichain protocols are at the forefront of interoperability as they are shedding the need for bridges. ( Cosmos, Polkadot, EVM compatible blockchains)
So, Two or more unrelated blockchains can connect directly using the infrastructural layer security thereby creating an internet of blockchain infrastructure.
Cross-chain bridge’s security issues are addressed by Multichain ecosystems (also known as Layer-0 chains), like Cosmos and Polkadot.
Working Principle Of Blockchain Interoperability
As a crypto native, you most certainly have been in a situation where you wanted to transact with tokens powered by different blockchains.
These transactions might require you to go through an intermediary, which could be an exchange or a bridge. What if there is a platform that can eliminate all intermediaries and give room for cohesive communication between new and even preexisting blockchains that is scalable and affordable as well?
Let us look at various operations that would facilitate interoperability between blockchains.
Side Chains and Relays
Initially introduced on October 22, 2014, in a published 25-page research paper by Adam Back who described it as a two-way peg mechanism. The Inventor of HashCash and the current CEO of Blockstream. he described it as
“a two-way peg mechanism that allows for the exchange of coins between sidechains and back at a fixed or otherwise deterministic exchange rate.”
He also said in his publication that “A pegged sidechain is a sidechain whose assets can be imported from and returned to other chains; that is, a sidechain that supports two-way pegged assets.”
Now we can define a sidechain as a separate blockchain that interacts with the main chain through a two-way peg mechanism.
They have often misunderstood them as “layer 2 scaling solutions.” Sidechains can wield their distinct consensus mechanisms, thereby improving scalability, privacy, and security without having to depend on any external intermediaries.
Examples of side chains
Bitcoin mainnet’s, Liquid Network is an open-source sidechain created by Blockstream, which implements properties essential to sidechains.
The Liquid Network’s block discovery time is just one minute, which means it surpasses Bitcoin’s 10-minute block time by tenfold.
Ethereum-Compatible Side Chains.
For a sidechain to operate on the Ethereum blockchain, it has to be compatible with the EVM (Ethereum Virtual Machine). Smart contracts are usually written in native EVM languages.
PolygonPOS, native to the Ethereum internet of blockchains, is a proof-of-stake architecture sidechain that leverages Ethereum’s security but thrives on Polygon’s speed, which dominates the stage of EVM-compatible sidechains.
Averaging 7,000 TXN per second and a gas fee that is 10,000 times more affordable than Ethereum’s
The relay chain is the integration layer. It can issue a token to be used for value exchange by all sidechains. The relay chain can offer smart contracts for different sidechains to interact with and exchange information and resources.
Also, it generally makes room for a larger number of validation nodes than any of the sidechains, thereby making provision for more robust security so that no double-spend is made on value exchanges.
An example is BTCRelay smart contract on Ethereum that can read the Bitcoin chain. It has been used to create applications such as Ethereum Lottery, Although bitcoin can not read the Ethereum chain.
Polkadot also uses a relay chain mechanism, It transmits information back and forth to the different blockchains ( known as Parachain).
Oracles and Notaries
Oracles and notaries are bridges between different blockchains, sometimes between a blockchain and the off-chain world. They provide smart contracts with off-chain information, which is expedient for executing certain agreements.
Oracles can use a decentralized design to increase trust and dependability by allowing information to be contributed from different sources.
For a notary scheme, In 2016, Vitalik stated that “one or more trusted nodes agree to carry out an action on chain B when some event on chain A happens“ and vice versa. Trusted nodes are the key to notary schemes. One important feature of the notary scheme is that they act as an intermediary between users who want to transact.
The notary may be a network of exchanges or a controlled exchange. The notary’s integrity might be the only factor affecting how well a notary scheme works. Examples are centralized exchanges like Binance, BitForex, etc.
HashTimeLock
HashtimeLock Contract (HTLC), usually an off-chain scaling solution, uses a smart contract to define transactions that are time-bound. It involves the locking up of assets to be released when a certain condition (confirmation of payments) is met. These escrows facilitate peer-to-peer transfers, thereby decreasing counterparty risks.
Like notary schemes, it is a mechanism that does not require a pre-existing trust relationship between the two blockchains.
We have the Bitcoin Lightning Network as a case study. Both parties must commit a certain amount of Bitcoin to start a payment channel. That Bitcoin is locked and cannot be released as long as the payment channel remains open. The total amount of Bitcoin that can be transferred back and forth through this channel is the total amount of Bitcoin committed initially.
Also, Raiden network utilizes the smart contracts of Ethereum’s blockchain to solve the problem of inefficiency and availability in lightning networks
Blockchain routers
Parallel to the internet routers used in web services systems, Blockchain routers serve as a foundational port for resources and digital assets and facilitate inter-blockchain connections between various blockchain networks.
In blockchain router network design, the different blockchain networks
such as Bitcoin, Ethereum, Binance smart Chain, etc
are referred to as terminal parts called sub-chains in the
routing network. Sub-chains cannot be in direct communication with one another and they can only communicate with a blockchain router.
Every piece of data on the sub-chain is kept on a blockchain, and this helps create a trust bridge between them.
Anlink blockchain network implements Ann-router to deliver interoperability across blockchains, it was stated in its whitepaper that “Ann-Router shall break down the communication barriers across chains, realizing the connection, communication, trust across chains”
Challenges of Blockchain Interoperability
For the scalability of the ecosystem, the notion of interoperable communications provided by blockchain might seem like a good fit, but there is a lagging issue that discomfits these victories.
Looking into the past, we can see Satoshi Nakamoto’s motivation for inventing bitcoin.
As stated in Bitcoin’s white paper, it was a means to circumvent the preexisting financial system. This garnered a lot of adoption until Vitalik published his white paper. He showed the world that there are a lot of possibilities that can be built on the blockchain.
So we have Ethereum, a blockchain that serves as a foundation for other inventors to build their decentralized applications (Dapps).
Listed below are problems plaguing the sustainability of blockchain interoperability.
Incompatible Languages & Validating Mechanism-
Most of the pre-existing blockchains do not utilize the same language nor use the same consensus mechanism these differences are a major stumbling block that opposes the officiating process of blockchain interoperability.
Security and Privacy: The constant interruption of intermediaries, which violates the entire concept of decentralization because some interoperability mechanisms require trust, has been one of the main problems the blockchain ecosystem has faced over time.
Interoperability Scaling Solutions- Cosmos & Polkadot
Polkadot and Cosmos are two major projects that have centered their focus on building interoperability between blockchains.
Cosmos is described as,
“ a rapidly expanding ecosystem of independent, interconnected blockchains built by implementing developer-friendly application components and connected with the ground-breaking IBC (Inter-Blockchain Communication) protocol.”
Cosmos
Cosmos was developed in 2014 by Jae Kwon. He proposed a blockchain that will help blockchains communicate with one another as a unit and a project that will make the creation of decentralized apps less complex and time-consuming for developers.
Cosmos has a native token called “Atom” to implement validation and governance in its ecosystem.
Cosmos has Three main pillars; Tendermint Core, the Cosmos SDK, and IBC.
Tendermint
This has three tiers of operations: networking, consensus and governance, and application. Basically, Tendermint integrates the consensus and networking layers of Cosmos into one, also separating out the application layer. This layer helps developers build new blockchains easily without going through the rigor of starting from scratch,
Cosmos SDK
this is a set of tools that enables developers to build Cosmos-compatible decentralized applications preventing them from having to write every line of code from scratch.
IBC (inter-blockchain communication)
This enables the interactions and digital assets between various blockchains participating in the cosmos ecosystem and external chains.
Polkadot
Polkadot was an idea birthed by Gavin Wood, who was a co-founder of the Ethereum project. He went on to create a cross-chain scaling model for the blockchain, As written on its light paper
“Polkadot is a next-generation blockchain protocol that unites an entire network of purpose-built blockchains, allowing them to operate independently and seamlessly together at scale.”
It has its own native token, known as “Dot,” which is used for its consensus mechanism and governance.
There are four major elements crucial to the working principle of this cross-chain technology.
Relay Chain
This is the core of the Polkadot network, It aids in managing its shared security, cross-chain interoperability, and consensus.
Parachains
Parachains refer to all those varieties of blockchains that are connected to Polkadot. They can their native tokens, peculiar functionalities, and use cases.
Parathreads
Tagged the pay-as-you-go model. These chains do not require continuous connectivity to the network. It helps parachains to temporarily participate in Polkadot security without needing to lease a dedicated parachain slot.
Bridges
Bridges enable parathreads and parachains to connect and interact with external networks like Bitcoin and Ethereum.
The Future Of Interoperability of Blockchain
The rapid growth of the blockchain industry remains unhinged, and the setback also remains. The system as a whole needs to carve a means to operate as a single unit for a greater user experience.
Interoperability technology aims to bridge all the gaps between preexisting and newly created chains together. This seems like a far-fetched reality from what the technology aims to do. Why?
As published Vitalik made a case for Mulitichain in this Reddit post he described the security concerns of cross-chain protocols. Which birthed the question is the future Multichain?
Some preexisting blockchains do not have the option to interact with other chains (Bitcoin).
This issue lingers, but we have some projects trying to break the bar and push for blockchain interoperability solutions.
We have Cronos, Quant, Cosmos, Polkadot, Allianceblock, and many more to come.
What if Satoshi resurfaces and makes bitcoin a flexible chain, would this be a major breakthrough, or not?
Drop your thoughts in the comments and also applaud.
Did you enjoy reading this article?
I write content for blockchain startups bridging the gap between developers and users.
Reach out to me at -AdetolaO@hotmail.com
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