Will Blockchain Interoperability be the Key to Successful Projects?

Will Blockchain Interoperability be the key to successful projects? In this whole section, we will see what the Blockchain Interoperability is and what will happen upon completing projects successfully. 

25 May, 2020, | AtoZMarkets – Blockchain Interoperability is the future of the ability of blockchain networks to interact and integrate with each other. There are many blockchain project developers who are working hard to bring interoperability in real life. The ability to share information through different blockchain networks is one of the important steps in the massive evolution of the blockchain industry.

The term ‘blockchain interoperability’ has come around for some time now. Still, the vast majority of projects are operating in silos to prevent the industry from reaching the full potential.

Recently, many new organizations have taken initiatives to facilitate interaction between networks with the concept of decentralization. Therefore, the Blockchain Interoperability has started to matter.

What is blockchain Interoperability?

Blockchain interoperability is the ability to share, watch, and access information on different networks without any intermediaries.

Currently, blockchain networks run separately from one another. For instance, the Bitcoin blockchain operates entirely separately from the Ethereum network.

There are big numbers of tasks in the world. All of these have extraordinary characteristics consisting of the kind of transactions, hashing algorithm, or consensus model. These characteristics specialize in a specific area. Some networks are designed for specific groups, organizations, or governmental departments.

None of those networks have the know-how of the records contained on different networks, despite running in the identical industry. However, the atmosphere is currently in threat of ‘Balkanisation’. Therefore it is becoming a sequence of unconnected systems operating alongside but siloed from, each different.

Blockchain interoperability efforts can be divided into two groups, as mentioned below.

  • Open protocols: It is a standardized protocol that allows blockchains to connect with each other without any intermediaries or trust. One of the most recognized open protocols is the Atomic Swap.  
  • Multi-chain frameworks: As we know, Blockchains can plug into a framework of the standardized ecosystem to transfer data and value between each other. Therefore, Multi-chain frameworks are more complicated than open protocols. Sometimes, they are referred to as the “internet of blockchains.”

Importance of the Blockchain Interoperability

Blockchain interoperability can make a mass adoption to let the industry evolve further.

The cryptocurrency market has become highly competitive. Some crypto projects put a lot of effort into beating their opponent numbers rather than focusing on the general infrastructure. In that sense, the blockchain scalability race is a good example. The scalability comes with a question regarding BTC’s insufficient performance. The original blockchain can make seven transactions per second (TPS). Moreover, some blockchain projects can perform 40,000 TPS.

Currently, the estimated capacity of the Visa network is about 24,000 TPS. However, it ostensibly only has to do just 1,700 transactions each second on average. In any blockchain, even the Bitcoin, is far from beating Visa in terms of transactions per second. 

No company would need to make transactions with a blockchain irrespective of how scalable if the overall infrastructure is. While its output might be higher than Visa’s, it won’t have equal usability across the world if it remains isolated. Meanwhile, credit or debit cards issued through global card schemes are interoperable across merchants and ATMs worldwide.

Similarly, the internet allows us to change and make a modification of numerous datasets through application-specific interfaces (APIs). If it wasn’t interoperable, it wouldn’t be capable of growing into what its miles these days a definitely international and easy-to-use network. The identical applies to blockchains. In order to advantage mainstream appeal, they have to expose that they can paint with every different seamlessly.

Blockchain Interoperability brings the following benefits:

  • Smooth information sharing among blockchains
  • Easier execution of smart contracts  
  • Sharing and cooperation of blockchain solution on the ongoing development.
  • IT staff can develop a deep knowledge of a few prominent blockchain standards without having a basic knowledge of many protocols.
  • Develop partnerships within the blockchain ecosystem.

Who Can Use the Blockchain Interoperability?

There are different methods of blockchain interoperability: cross-chains, sidechains, proxy tokens, swaps, etc.

Interconnecting existing blockchains is no easy. As per ConsenSys’ research on the topic, “commercialization promotes competition and innovation, incentivizing developers and entrepreneurs to build systems that work best for their customers.”

As a result, open-source interoperability became overlooked, and most blockchains have no built-in features to support it. However, several blockchains projects have focused on interoperability by employing different approaches. 

Let’s have a look at examples of some projects that focused on interoperability.


Wanchain uses a protocol to facilitate data transfers without connecting blockchains. Therefore, instead of deploying multi-chain analogs or peg zones, Wanchain creates “wrapped” tokens to trade on other blockchains. 

For instance, to move 10 ETH to the BTC chain, the platform will lock the ETH on the Ethereum blockchain using smart contracts. Later on, it would mint 10 Wanchain-wrapped ETH (WETH) on Wanchain. Therefore, users can trade WETH for Wanchain-wrapped BTC (WBTC) through a trading platform. This is how the wrapped BTC token can be turned into the original tokens on the Bitcoin blockchain. 


Cosmos follows a cross-chain principle. It employs an inter-blockchain communication (IBC) protocol to establish the blockchain interoperability. It usually serves as a similar TCP/IP messaging protocol for blockchain networks. Although several blockchains do not support IBC, Cosmos uses the so-called “peg zones” to connect the “Cosmos Hub”. The project is often called a “flagship” blockchain. It binds all the zones together and coordinates the communication between them via a standardized language.

However, the Cosmos Hub is the part of a larger interchain ecosystem that is developed by Cosmos to contain other entities. Moreover, there is also Iris Hub that focuses on enterprise customers and Chinese clients.


Unlike the above-mentioned examples, Quant is not a blockchain. It uses the Overledger protocol that runs over existing blockchains. Overledger ostensibly allows programmers to create “MApps”. It is a decentralized application (DApps) that utilizes multiple blockchains at a time with “three lines of code” and without any additional infrastructure. It allows more options in blockchain engineering. For instance, a MApp could depend on the Ethereum blockchain as data storage while Bitcoin Cash (BCH) as a value transfers. 

Moreover, those are not the only projects that are working toward establishing blockchain interoperability. There are similar projects like Aion, Cardano, Ark, Icon, Bytum, and Dragonchain.


Polkadot is a multichain technology. Basically, it allows several blockchains to plug into a single larger within a standardized ecosystem. It was created by Gavin Wood, who was a co-founder of Ethereum. 

Polkadot is created with parachains. It is a relay chain, and bridges that connect Polkadot to other external blockchains.


It is a decentralized oracle service. It allows data to retrieve from off-chain APIs and put on a blockchain. Moreover, Chainlink serves as a connector between blockchains and other infrastructures that exist off-chain. Oracle nodes receive real-time data and process it through the network before taking it to the blockchain. 

Notably, the company cooperates with some global interbank data transfers and payment system SWIFT, which is used by most of the banks across the world.

Will Blockchain Interoperability be a Game Changer?

Yes. Interoperability has the ability to be a game-changer in the blockchain industry. But there are lots of hurdles to overcome. Many blockchains are still moving in different directions. Therefore, they are competing with one another and don’t have features to support interconnection. However, as interoperability start-up ventures gain traction, it may help to persuade seamless exchange networks to the success of the entire market.


Blockchain technology is getting more and more common day by day. Many people are getting familiar with Blockchain Interoperability. However, the concept of the blockchain interoperability was created by IT specialists. Therefore, the usual Internet was hard to understand for the people.

When the interoperability race is over, we may see companies who triumph and ones who fail. However, for the industry at large and the end-users, the exciting thing will be the possibilities of interoperability realized as a major game-changer for all.

Think we missed something? Let us know in the comment section below!

Share Your Opinion, Write a Comment