The State of Blockchain Interoperability in 2021

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Blockchain technology is a decentralized and distributed ledger that registers the origin of a digital asset. A blockchain expert understands how all blockchain platforms work, have expertise in programming languages and can unite corporate business solutions with corporate blockchain solutions. The three main categories of Blockchain Interoperability are Public Connectors (Cryptocurrency-directed approaches), Blockchain of Blockchains (Blockchain Engines), and Hybrid Connectors (Blockchain Connectors).

The public connectors are “strategies across public blockchains supporting cryptocurrencies, including sidechain approaches, notary schemes, and hash time hash locks.” These include sidechains, notaries, and HLTCs. Interoperability techniques over public blockchains are well-known and extensively used.

Blockchain of Blockchains are structures that provide reusable data, network, consensus, incentive, and contract layers for the formulation of application-specific blockchains that interoperate amongst each other.

Hybrid Connectors are “interoperability solutions that are not Public Connectors or Blockchain of Blockchains. They endeavor at delivering a “blockchain abstraction layer,” competent of exposing a collection of uniform operations allowing a dApp to interact with blockchains without the necessity of using different APIs.” These are developing solutions that will connect most types of blockchains, other DLTs, and centralized systems. Hyperledger Cactus is a great example.

How these categories relate?

Several categories of clarifications approach the interoperability problem differently. Token exchange is no longer the entire scope of blockchain interoperability. Alternatively, several interoperability approaches appeared in the last years, whereby many of them aimed at inducing blockchain interoperability. In particular, emerging solutions can get classified as Hybrid Connectors, which give cross-blockchain communication, and Blockchain of Blockchains, which allow an end-user to generate customized, interoperable blockchains at the expense of vendor lock-in.

Public connectors are the most mentioned in the industry and academia, as they present practical solutions to real-world problems. As these were the first solutions to appear, some may not succeed. It resembles that the merger of sidechain and protocols relying on an escrow party (enforced by smart contracts) are the fittest solutions for interoperability among public blockchains. However, designing and maintaining a decentralized application using various blockchains was difficult — and hence the Blockchain of Blockchains solutions emerged. While it gives a consensus engine and a security infrastructure to build blockchains, it sights at developing resolutions using different infrastructures.

Hybrid Connectors, especially blockchain migrators and blockchain of blockchains, move towards a user-centric, blockchain-agnostic view, allowing enterprise-connected CC-dApps. The most suitable answer for combining private blockchains is the application of blockchain-agnostic protocols. Nevertheless, they do not allow backward compatibility (as all past solutions have to be modified to integrate the adopted communication protocol). For overcoming this fact, the short-medium-term solution would be applying trusted relays. A way for advanced relays to try is by decentralizing the escrow party: from a set of advanced validators to a system of public nodes.

Conclusion

While Public Connectors methods are usually getting used nowadays, we concentrate on the Blockchain of Blockchains and Hybrid Connectors. They allow interoperability between blockchains and other distributed ledger technologies and enterprise systems. It promotes the advancement of blockchain interoperability standards. While blockchain matures, industries might tend to consolidate this technology into their business processes. Then, we predict that mass adoption will get followed.

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The State of Blockchain Interoperability in 2021 was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

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