Blockchain Interoperability | the Next Phase of the Blockchain Evolution

In its functional sense, a blockchain is the ledger or record base of an isolated cryptocurrency powered peer-to-peer network. The premise of a blockchain network is to create a room for a trusted and fluid interaction of nodes/users on a blockchain network. The Bitcoin blockchain is a practical proof to that premise. However, the crowning achievement of every technological innovation is large-scale mainstream acceptance.

Why Blockchains Should Interoperate

For an innovation that has gradually evolved into an industry, there is a growing and necessary need for the interactions of the various branches of the industry, which are spurring up by the day. In this adaptation for change, several improvements have been made in less than a decade. The Ethereum smart contract is one of such improvements, which created a breeding ground for the adaptation of this technology across several businesses.

However, one major problem that is hindering the large-scale adaptation of blockchain platforms is their isolated nature. Fundamentally, Blockchain networks are built to be self-sustained. While this is a useful feature, one blockchain is usually limited, regarding its use case and token circulation. Due to this, an interaction with other blockchains to improve their collective utility will be a groundbreaking step.

At the moment, third parties are often needed for the transfer of digital assets to other forms of assets, usually via a centralized exchange. This is fundamentally contrary to the cryptocurrency paradigm of an independent system. Sadly enough, these third parties have been the soft spot exploited by cryptocurrency hackers, repeatedly.

Imagine how frustrating it would be if you could only spend or transfer your fiat funds within the network of a bank, and you needing a third party to transfer your funds from one bank to another. Alternatively, imagine always needing a third party to transfer a file generated on a Windows-powered device to a Linux-powered device.

Given this problem, several blockchain based solutions are currently under development, although their approaches to this solution are different. The basic transfers that currently go on on these distributed ledgers is that of transaction and movement of assets, which are transported as digital data, with several authentication procedures for validation. However, as we have found, these assets or data are trapped within the walls of their blockchain.

The Science of Blockchain Interaction

Very recently, several proposed solutions have been proffered, but their practicability and applicability in real life scenarios have not been fully proven. At the moment, the tool used for this trans-blockchain data and token transfer function are sidechains. These sidechains are smaller blockchains, plugged into the main blockchain through a process called “two-way pegging.” This allows for the forward and backward transfer of tokens and data.

Blockchains that Interoperate

While this tech is in its infancy, here are some use cases that provide varied spins to this blockchain interoperability solution.


The Aelf project provides smart contracting functionalities for the creation of decentralized applications. It does this through its mainchain, which has several sidechains connected to it. These sidechains can execute diverse smart contracting tasks while interacting with each other through the mainchain.

Also, the Aelf network is compatible with external blockchains like Bitcoin and Ethereum.


This blockchain is fundamentally built for the interaction of several blockchains. In what is termed inter-blockchain communication (IBC), the Cosmos network is one that provides a playing ground for several isolated blockchains, through the use of what is called parallel chains on the Cosmos system.

The mainchain on this network is called the Cosmos hub, and the sidechains are called zones. The hub keeps an accurate, detailed record of what is stored in the various zones attached to it. This concept of zoning allows other independent blockchains to be plugged on the Cosmos hub, hence allowing for the transfer of assets without the need of an external third party.

While these platforms seem like the most likely the solutions for the interoperability of blockchains, there are tendencies of data compromise in this sidechain process. Nevertheless, the good news is that there are several proposed solutions, and this technology is a growing one with several hands all working to improve this interaction.

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