Blockchain Interoperability


Often you will hear people talking about how will blockchain interoperate with other emerging technologies? By now, many people are aware of blockchain’s potential to improve all business processes, provide transactional transparency, significantly improve security, and reduce operational costs. In spite of all these positives and the potential for significant change, the expected mass adoption of blockchain has failed to happen up to the present. The answer is in the challenge of blockchain interoperability itself.

Though there have been a few concerns and challenges towards the shift to blockchain applications, the most widely recognised problem to mass adoption is that of interoperability. Or perhaps, the lack of it.


Blockchain interoperability

There is now a large number of blockchain applications working all over the world for different characteristics. These range from consensus models, hashing algorithms, to all types of transactions. Each blockchain is focused only on a particular task and area. While blockchain is a proven decentralised technology, individual or independent blockchain networks are not open, and therefore, cannot communicate with each other.

There is a further problem in which different networks and financial institutions run completely different governance rules, regulatory controls, and blockchain versions. This has resulted in diverse blockchain ecosystems operating independently from each other. You could say they are like racehorses wearing eye blinkers so they can only run in one direction. Since one blockchain cannot see the other blockchains running near it, this prevents the industry from reaching its maximum potential. 


There is no doubt that blockchain technology can greatly improve any business process, especially when it comes to security, record keeping, and financial transactions. But for now, the possibility of blockchain systems communicating with each other is a real challenge. Today, there is a serious need for blockchain ecosystems to have the ability to share, see, and access information from each other’s networks. Despite different blockchain ecosystems operating on their own functionalities and capabilities, interoperability means being able to integrate different existing systems; initiate all types of transactions on each other’s networks; conduct contracts and transactions with other chains; transact between deployments on the same chain by integrating apps, and making it easy to switch from one platform to another.


The way for businesses to maximise higher levels of collaboration and integration is to have blockchain interoperability. If interoperability is allowed to reach its full potential, it realises the full promise of getting the most out of blockchain investments. Interoperability will mean enabling smooth information sharing, easier execution of smart contracts and transactional payments, the sharing of solutions, and the opportunity to develop partnerships. All this will be to the advantage of businesses but without sacrificing security and efficiency anywhere.

Interoperability becomes essential in value chain areas such as supply chains, trade and finance, healthcare, and aviation, to name just a few. For instance, in the supply chain industry, blockchain can allow disconnected supply chain management systems to connect and interoperate securely without giving up security and without high investment costs. Imagine one country using a single network of interoperable blockchain systems for all its supply chains. This will mean fewer financial losses due to lost or delayed shipments if any cargo were to be lost or delayed at all. This is how efficient a blockchain system can be.


Until most recently, most blockchain interoperability solutions were mainly focused on chains across public blockchains that used crypto-directed tools. Now, there is an effort to re-focus towards interoperability solutions for private networks or between private and public networks. 

 One sure way to solve interoperability is to create a separate blockchain system to be used as a bridge for all facilitation of interoperability to different blockchain ecosystems. This separate blockchain acts like a third-party mediator that sits in the middle of all the other blockchains. This third-party blockchain still maintains the usual cryptographically secured timestamped ledger of all transactions, messages, information sharing, and others between all the other blockchains. This means that the blockchain system of decentralisation is still unaffected even if there is a third-party facilitator.

 Another solution is to use interoperability facilitating systems using middleware or off-chain systems. This non-blockchain interoperability approach can use tools like state channels, oracles, and atomic swaps, and will not compromise the decentralised nature and ledger security of blockchain ecosystems.

Moving forward

In truth, interoperability solutions may sometimes be only as good as the professionals that create and implement them. Sometimes, blockchain ecosystems may only be as good as the professionals who create them as well. This is why more applied blockchain professionals are needed, preferably those with applied blockchain diplomas or degrees. The success of the future of applied blockchain and cross-communication interoperability among blockchains is in the hands of these blockchain professionals, which, unfortunately, we are very much shorthanded. It is already widely accepted that blockchains changing business processes and interoperability solutions are critical to the future.  

Blockchain Collective

Blockchain Collective is an educational body that works in partnership with Registered Training Organisations (RTOs) to deliver a benchmark standard of education that professionals and students with the necessary skills can practically use for a future in blockchain technology. 

The Advanced Diploma of Applied Blockchain 10747NAT is the first-ever in Australia. This course, as well as the Diploma of Applied Blockchain 10849NAT, both created by Blockchain Collective, are designed to give people the proper gained knowledge and experience in applying blockchain frameworks after they earn their applied blockchain diploma.

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