How Important is Blockchain Interoperability?

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Blockchain interoperability describes the process by which different blockchains can communicate with one another, allowing a smoother process of sharing information. Many consider interoperability key to the success of blockchain applications being user-friendly, practical, and economically efficient.

Think of it in terms of social media; if everyone’s friends are using different platforms that can’t interact with one another, the success of such platforms is significantly restricted and monopolies will emerge. In the cryptocurrency space, is there really room for success for all the tokens out there running on different blockchains? How useful is a smart contract on one platform if it is not recognized on another?

As major corporate giants including Walmart and Pepsico begin rolling out their own blockchain applications, it seems only a matter of time before a protocol will be developed to enable such platforms to communicate with one another without issue. Several attempts to provide a solution have been rolled out, although their achievements so far have been limited as the technology is still in the early stages of development.

Here are some of the biggest projects to date:

Aion, Quant Network, and XRouter

  • Quant Network’s keystone project is called OverLedger, a ledger system for ledgers themselves, operating as a meta-gateway for connecting blockchain networks. Eventually, the project hopes to connect centralized industries such as financial services to blockchains.
  • Aion is a smart contract platform focused on the interoperability of blockchains and java based contracts. It aims to become the common protocol to be used between blockchains for creating a more efficient decentralized system. It focuses on the concept of a ”federated blockchain network.”
  • The beta version of XRouter was released just last month, claiming to be the first ”blockchain router” on the market. The platform serves as the foundation for multi-blockchain architectures, letting users build Dapps with features from any existing blockchain. By allowing blockchains to communicate, XRouter believes it will promote increased adoption of Dapps.

The fourth industrial revolution

The rise of the autonomous economy is considered to be propelling the world’s fourth industrial revolution, and blockchain plays a significant role in this alongside IoT and AI. However, for these three technological components to synergize efficiently, blockchain interoperability is paramount, else there will essentially be communication blocks between the technology and a lack of user-friendly versatility meaning that blockchain and other decentralized ledger technologies (DLT) will just not be adopted at high enough rates.

With blockchain interoperability running alongside AI and IoT data, the networks can run themselves and grow smarter over time though machine learning. This would be the culmination of the fourth industrial revolution. It would seem only a matter of time before blockchain interoperability becomes a reality for everyday actors in the economy.

Is this one of the biggest hurdles for blockchain in 2019? Probably, yes. But by the looks of the current adoptions rates of the solutions on offer, seeing true interoperability is still several years off.

Really, it is a race between blockchain interoperability projects to create the first mass-adopted solution and reap the rewards.


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