Cross chain is considered a technology that improves the interconnection that happens between different blockchain networks. It permits the exchange of value and information. While accomplishing this task, it manages to break the siloed behavior of blockchains for forming a tangled distributed ecosystem. Commonly, a cross chain does operate from a connected platform independently. And so, it does not become heir to the deficiencies of interfaced networks. An inter-blockchain technology intends to eradicate intermediaries while shifting value between different decentralized networks. And so, it enables users to have an interaction with various other blockchains efficiently.
Some top cross chain projects
A few top cross chain projects comprise Cosmos, Wanchain, Blocknet, and Polkadot. Each one of them concentrates on various aspects of interoperability and cross chain support. For instance, Polkadot intends to improve the sharing of data of smart contracts between distributed platforms. On the other hand, Blocknet concentrates more on a DEX or decentralized exchange that operates between several blockchains.
Again, Wanchain also observes a future where every digital asset does live on only one network. In this matter, Cosmos proposes a base which supports other blockchains utilizing zones that get connected to a vital protocol, known as the Hub.
A few industries that need cross chain technology comprise DeFi or decentralized finance and health. When the matter comes to DeFi scene, then inter-blockcain connectivity allows the swaps of tokens between various networks. And so, it fosters interoperability and it is highly vital for a financial ecosystem for thriving. With the help of cross-chain technology, users can overcome usual trade-offs amongst distributed platforms. It also taps into the advantages of different consensus processes so that they can derive the finest from every world.
In the healthcare sector, a cross chain system promotes data ownership, transparency, efficiency, and security via encryption.
Why do people need blockchain interoperability?
Blockchain interoperability is hugely required for subduing the confined capacities of the protocols of blockchain and achieving improved scalability, higher security, and quicker block times. Interoperability does also aid in lessening the operational prices connected to blockchain solutions. Some of the limitations of blockchain result from very little or no interoperability of blockchains:
- Shortage of direct interoperability that happens between Ethereum and Bitcoin. This lessens the users of bitcoin from utilizing their funds of cryptos in Ethereum’s DeFi ecosystem.
- As there is present non-interoperability, a user can’t transact ETH or BTC without including a centralized cryptocurrency exchange.
- Binance Smart Chain and Ethereum support USDT but one of them can not send USDT directly from the blockchain of Ethereum to Binance Smart chain. In this regard, it cannot send USDT to other blockchains too.
- The pioneers of blockchain envision using Blockchain in the customary financial system. However, the confinement of interoperability does hinder the significance of an effectual solution. It happens as when two banks utilize various blockchains then it becomes too complicated, if not impossible totally to transact bank accounts. In the absence of interoperability and cross chain support, blockchain present in the finance system forms a segregated system in place of a combined one.