Blockchain Interoperability

We often talk about blockchain technology, peer-to-peer connections, decentralized technology, etc. It would be interesting for you to know that there is another feature associated with the blockchain called ‘Blockchain Interoperability’. In this blog, we shall learn about what is ‘Blockchain Interoperability’. We shall also learn about its advantages and disadvantages.

An introduction to ‘Blockchain Interoperability’

It is clear from the word, Interoperability, itself that it is all about operating various activities across the blockchains.

Blockchain Interoperability is the capacity of the multiple blockchain networks to share and exchange data between them and move unique types of digital assets among them.

When the diverse blockchain networks and assets are connected to each other and merged into interoperable systems they can be used for developing new goods and services combining the advantages of many blockchain technologies.

Significance of Blockchain Interoperability

Blockchain interoperability has the capacity to seek access and exchange data among several blockchains and blockchain networks. This is what makes blockchains important for miners and investors. People trust the blockchains as they work as a source of transparent transactions.

It also allows the users to expand their networks for bigger and better benefits.

The blockchain interoperability also has the potential of playing a significant role in mining, trading, and providing more and more facilities on the DeFi platform, and controlling the major activities in virtual markets.

Advantages of blockchain interoperability

• To have customized web3 services — Many experts believe that blockchain interoperability can easily mix and match the services and hence it has the potential to trade across various sectors such as healthcare, law, real estate etc. There is also room for multi-token transfer and wallet systems which could be helpful for the users.
• Highly Decentralised Ecosystem — Even the individual blockchain system ensures to provide a decentralized platform to maintain transparency. Hence, the interoperability would open the doors to more and more decentralization and therefore more transparency. Moreover, it would also increase the speed of transactions.
• Cross-Industry Collaboration — It provides more transparency, verifiability, and smart contract execution across a wide range of sectors. When the different organizations and industries are able to interact with one another through blockchain interoperability, independent markets and business applications will be able to more easily transfer data and value more effectively and effortlessly.

Disadvantages of blockchain interoperability

• The reverse flow of blockchain is not possible — It means once the blockchain is registered on the network it cannot go back to its original position. In other words, blockchain cannot flow in the reverse direction. This is why validation of information becomes mandatory in the beginning before submitting it to the blockchain.
• Interoperability between two different networks is not possible — The interoperability works only among the different networks running on the same platform. The interoperability among the blockchains of two different networks is not possible. For example, blockchains running on ethereum cannot be interoperable with the blockchains of bitcoin.
• Highly Restricted — Even if the interoperability provides more transparency and speed there are still many restrictions regarding various elements like smart contracts etc. making it more complex for the user.

Final thoughts

So, this is how we observe that, while being a potential element with promising results like more reliability, transparency, and speed boost, Blockchain Interoperability still remains flawed and restricted. In the future, if we are able to curb these defects of Interoperability then it would be a great contribution to the crypto-world and possibly reduce the problems that traders face due to it.