Interoperability is a fundamental problem that the blockchain sector has not been able to fully overcome since its inception. Although this buzzword is used frequently in blockchain technology circles, it is difficult to define exactly what interoperability is and what it means in practice for the industry.
The ability of software to seamlessly communicate and share information with other programs is the standard definition of interoperability. This term takes on new meanings and nuances for the fledgling blockchain sector, which encompasses over 1,600 different projects operating on numerous distinct protocols.
The lack of interoperability and common protocols across the many existing blockchain platforms is a fundamental barrier to the adoption and spread of blockchain technology and its applications, according to a 2018 analysis by Big Four consultancy Deloitte. Similarly, Rand Research discovered that the biggest opportunity for continued adoption of blockchain technology is to adopt an industry-wide standard.
Here we look at what blockchain interoperability is and what impact a fully interoperable solution would have on the blockchain industry.
What is the definition of interoperability?
Interoperability in a blockchain environment refers to the ability of individual blockchain protocols and blockchain-based applications to interact and collaborate. Currently, sending a transaction from one chain to another, e.g. B. from the Bitcoin network to the Ethereum network, the use of atomic swap functions or a comparable third party. Although third-party apps exist to meet this demand, many of them are inefficient cross-chain transactions.
While interoperability is less necessary if you’re just passing values down the chain, such as B. buying something with Bitcoin or sending cryptocurrency to another party, it is crucial for the development of decentralized apps (dApps), smart contracts and multi-chain solutions.
Imagine a real-world asset like a stock represented as a security token on the Ethereum network. The issuing company may seek to sell its shares to members of the EOS community, so it would be beneficial to have a compatible digital asset that could be issued or held on either chain.
This is the most basic type of interoperability. However, since each blockchain is developed using different programming languages, technologies, token standards, and consensus mechanisms, achieving interoperability has proven very challenging.
As a result, applications built on one chain cannot be readily connected to those built on another, and despite their decentralization, we end up with information and asset silos similar to those in traditional systems. In order to fully utilize the potential of blockchain technology, we need to solve the interoperability problem.
Why is dApp interoperability important?
Interoperability becomes more important when processes become more complicated than just exchanging values, as we have already indicated. Cross-chain interoperability for dApps will greatly expand their user base, diversify the digital assets that can be used or exchanged within the app, and enable the development of entire cross-chain dApp ecosystems.
There is no way to effectively change which underlying assets are used within a dApp built on a single blockchain, as each blockchain acts as a silo of both its framework-level assets and that particular blockchain’s transaction data. Consider developing a non-fungible crypto collectibles dApp for trading ERC-721 tokens.
Other chains would not recognize these collectibles, so they could only be bought and traded on the Ethereum network. If this dApp was instead developed on a secondary layer that is compatible with different blockchains, these assets can be freely and smoothly exchanged between protocols.
This situation can be compared to an international transfer. Banks that only serve customers in one currency and do not allow international wire transfers or currency exchange payments would be severely limited in their operations. Almost all blockchain protocols recognize the importance of creating a truly interoperable solution for dApps and smart contracts, but this is difficult.
Analogue is a protocol that makes it easy for different blockchains to work together while taking advantage of the network’s scalability and security. The communication protocol that provides valid, trusted data transmission is the core of Analog’s interoperability feature (which is implemented in the Timegraph API).
The protocol allows unique and sovereign blockchains to interact freely while sharing only the bare minimum of a common interface in a private, secure, and trusted manner. The protocol is built on the Ethereum blockchain. Any node in the network can join and become a tesseract, connecting to the other nodes in the chain. Any node in the network can join the timechain in the same way and add or remove blocks.
Unlike most existing bridges, the framework offers a fully decentralized interoperability solution. Any node can join the network and become a tesseract that communicates with other nodes in the chain. Any node can join the network and add or delete blocks to the timechain in the same way.
dApp adoption is driven by interoperability.
We believe that interoperability will be one of the main drivers for the adoption and proliferation of dApps, allowing this embryonic technology to thrive. That is why we are working with our DNA chain solution to establish an interoperability standard.
The DNA chain was created as a single common reference point for developers, but can be used on any other blockchain platform. Many other projects have theoretically provided comparable capabilities, but the DNA chain is one of the first to allow developers to design and deploy dApps on top of DNA, with their back-end infrastructure running cross-platform, making them truly interoperable.
This is an important first step toward bringing much-needed uniformity to the blockchain space. Interoperability is one of the main reasons holding back the mainstream adoption of dApps, according to Deloitte, and we anticipate that dApps will attract many more average daily users with our solution. Interoperability is possibly the most important element for the future of dApp adoption right now, and it’s high time to fix it.
In its most basic description, interoperability refers to the circumstance in which a group of characters, assets, or infrastructure work together to share their characteristics. In software, it means essentially the same thing. Since the dawn of the Internet, interoperability has always been considered the best way forward. Sites and programs that require a Facebook or Google login to avoid creating a new account are examples of web interoperability.
Interoperability within and between blockchains has so far been considered a major difficulty. It caught the interest of developers who were considering building bridges across different platforms and apps. The availability of many blockchain networks with different consensus models, transaction systems, and smart contract capabilities presented the main barrier to interoperability.
Developers can see that interoperability with the Analog protocol is a realistic goal. Linking numerous unrelated programs increases the usefulness of not just one, but all linked applications.