Blockchain technology arrived with Bitcoin in 2009, about 17 years ago. It came with a lot of hope. After the 2008 banking crisis, many people had lost trust in big banks and central authorities. They wanted a fairer global financial system.
Over the years, the technology has grown a lot. It started as a way to store and share data. Today it is a full ecosystem that touches almost every industry, including:
- Gaming and art
- Health and data security
- Finance and global shipping
It all began with one blockchain, Bitcoin. Now there are thousands of blockchains, maybe tens of thousands. Each one has its own transaction history, community and values worth protecting.
Most of these projects try to build sound money as an option to today’s paper money. Some work on the growing data privacy problem. Others help sports fans connect with their teams. Still others create digital art or build Metaverses that people can enjoy for culture or profit.
All in all, the blockchain industry is growing into a global economy. The communities around it also need to grow and change. Just like in real world economies, diversity and teamwork could be the key to blockchain’s global mass adoption. If you are new to the topic, start with our guide on what a blockchain is.
Why Blockchains Need Interoperability to Unlock Web 3 Potential
Most of the internet still runs on Web 2.0. In this model, computers use HTTP to find information stored on servers. That makes today’s internet centralized. A small number of companies or authorities own and control the data.
This has some benefits, but it also brings problems:
- Systems are open to hacking and corruption.
- Personal data is often poorly protected.
- Big companies and governments control data, connections and many online services.
Blockchain and Web 3 spread data across many places. Users can store their information without relying on huge central databases. Still, many in the blockchain space worry that Web 3 leans too much on old systems. That reliance holds back what the technology can do.
The launch of Ethereum changed the field. It came with smart contracts. These are programs that run on the blockchain by themselves. Today, blockchains host decentralized applications (DApps). People use them to chat, trade assets, create art and share data.
The problem is that blockchains are still cut off from each other. They work like closed cities. Each has its own economy and businesses, but there are no highways to the other cities.
For the world to move from Web 2 to Web 3, blockchains need a better way to share data and assets. That method should be smooth, universal and decentralized. This ability to connect is called interoperability. Our guide to blockchain interoperability explains it in more detail.
How Blockchains Suffer From a Lack of Interoperability
Poor links between blockchains have slowed down adoption. Bridges are the most common fix so far. A bridge is a tool that moves tokens from one chain to another. But the industry still needs better ways to break down the walls between chains.
Most bridges have clear weak points:
- They are often costly to maintain.
- They take a long time to build.
- They are often run by a single company, which decides which tokens and networks to support.
These weak points have proved costly. In 2022, hackers stole about $625 million from the Ronin bridge and about $320 million from the Wormhole bridge.
To solve this, projects such as Wanchain aim to build fully decentralized links between blockchains. Wanchain builds direct bridges that connect many separate networks. Anyone can create their own bridge on the platform. The nodes that run the bridges are re-elected every month.
Wanchain bridge nodes also use two types of cryptography, called “Secure Multiparty Computation” and “Shamir’s Secret Sharing.” These methods keep transactions secure and private.
Many DApps are also moving to cross-chain networks. Blockchain games lead the way. For game makers, interoperability is a key way to reach a new generation of players.
Fashion League, a play-to-earn (P2E) blockchain game, is one example. It could gain a lot from good interoperability. Players could move items between games and trade NFTs more easily.
The game is built around fashion. Players can:
- Build and grow their own clothing store
- Work as virtual 3D fashion designers
- Sell, trade and rent out products to other players
- Join design contests and create their own fashion NFTs
These NFTs and products can move across several blockchains. That makes the game easier to use while players earn rewards.
Interoperability is still young. But as the industry grows, more platforms should focus on smooth transfers. Moving assets between chains should feel as easy as sending money from one bank account to another.
Final Words
The blockchain market keeps growing, and many expect it to reach global use within the next few years. To speed up adoption and add value, good communication between chains and a diverse community are key. With solutions already in place, interoperability could be what pushes blockchain into the mainstream.
