Interoperability - the Key Blockchain Challenge in the Fragmented Web3 World

As time goes on, Web3 is becoming more and more mainstream. Terms such as crypto, Bitcoin, and NFTs have become household names. Still, blockchain has limitations that keep it from reaching its true potential. One of the major blockers is that these protocols are isolated, with little to no communication between one another. Therefore, for the expansion of Web2 into Web3 to proceed effectively, interoperability is a necessity.

What are Key Blockchain Challenges?

As with any new and upcoming technology, blockchain has faced many important challenges. These will need to be addressed before true mass adoption can happen.

Negative Sentiment

Since its inception, there has been a lot of negative sentiment toward blockchain technology. To make matters worse, this negativity has come in many forms. This includes claims that the market is a bubble, criminals using it to hide their illegal activities, or even that the entire ecosystem is one giant scam.

As with any product or service, widespread negativity will prevent people from using it. Luckily, there is a lot of positive sentiment to counteract it as well. Real blockchain use cases are starting to receive coverage in the media. Just recently, CNN published an article detailing the future of the Metaverse. In addition, institutional investments are happening, and general word of mouth is getting stronger.

High Complexity & Lack of Understanding

The higher the barrier, the harder it will be for mainstream adoption of Web3. Many basic features of cryptocurrencies, such as downloading wallets, using crypto exchanges, or sending transactions, are still far too complex for everyday users. In addition, there is a general lack of understanding surrounding blockchain in general. Many people not only don’t understand how it works, but they also don’t truly realize its potential benefits.

Today there are many efforts to help lower this barrier and to spread knowledge of blockchain throughout the world. Many crypto companies have established incentivized programs aimed at teaching their uses about various crypto projects. To name a few, Binance has its Learn & Earn program, while Coinbase has its Earn program. Other companies, such as IBM, offer certificate programs for blockchain courses.

High Energy Consumption

Proof of Work (PoW) blockchains, such as Bitcoin, utilize a lot of energy to secure their chains. This means that Web3 often has the stigma of not being environmentally friendly, despite accounting for only 0.05% of global carbon emissions.

Fortunately, many other greener consensus mechanisms have been used over the years. Ethereum now uses Proof of Stake (PoS), while Lisk uses Delegated Proof of Stake (DPoS). Both utilize much less energy and are therefore much more environmentally friendly.

Limited Scalability

Today’s society expects fast and reliable systems of communication. Blockchain itself has grown in popularity immensely, meaning it is also being used more. With the higher demand of having more and more transactions at any given time, scalability has become a real concern in many chains. This has resulted in a combination of high transaction fees, long processing times, and unprocessed transactions.

Limited Communication

With so many different blockchains, there are a variety of use cases to meet the everyday needs of users. While providing a number of solutions can be a great thing, there is a significant problem that exists today. Communication between these various blockchains is lacking, and many times none existent. Even applications on the same chain may not have a straightforward way to communicate with each other.**
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This is where the need for Web3 interoperability becomes clear. With interoperability solutions, such as Lisk’s, there is hope that communication among various blockchains will greatly improve in the near future.

The Blockchain Interoperability Problem

One of the greatest challenges faced by Web3 is its inability to communicate outside of an isolated chain. Simple tasks such as bridging coins from one application to another is confusing, time-consuming, and oftentimes expensive. Tasks such as this need to be much more straightforward.

Let’s take a look at a real-world example. Cell phone use has grown drastically over time. In the early days, practically every cell phone had a different charger. This meant that users would have a harder time purchasing a charger that fit their phone model, and would be much less likely to be able to find one to use in moments when their battery was low.

Today, these chargers are much more standardized, with only a few different connections being used. This makes a simple but convenient act of borrowing someone’s charger when your phone is about to die possible.

Why is Web3 Interoperability so Important?

Current Web2 technology relies on centralized databases. These databases are vulnerable to malicious actors and attacks. By working towards the integration of a decentralized Web3, we can greatly improve security and trust in our use of the web.

Web3 interoperability allows users to access a plethora of applications across various chains, without ever leaving the decentralized space. This allows freedom of mobility, while maintaining adequate security that is expected.

Interoperability is a very important concept for Web3, as it will bring an increase in functionality. It also means that Web3 use will be more seamless, smooth, and reflective of the internet we use today.

Web3 Interoperability and Blockchain Mass Adoption

Mainstream adoption of blockchain is an important goal. In order for it to be successful, new users need to see that it is fast and simple to use. Not only that, but it also needs to fill a need they have as well.

Web3 interoperability will also assist with scalability issues faced in blockchain today. Currently, each chain is required to process and store every piece of information. By being able to communicate with one another, they will not be required to handle this additional bloat. Also, each chain can focus more on its intended use case(s), allowing for faster and more reliable performance.

Web3 Interoperability Solutions

There have been many propositions over the years to reach interoperability. Most of these solutions have focused on an inner ecosystem, which addresses the needs of that specific community.

Lisk

Lisk aims to use a form of sidechain technology by utilizing general cross-chain messages. These allow for any kind of data to be transferred between chains. This makes them much more powerful and flexible when compared to other interoperability solutions.

Polkadot

Parachain technology is the cornerstone of interoperability within Polkadot. Parachains are individual Layer-1 blockchains that have the ability to function in parallel within the Polkadot ecosystem. These parachains rely on central shards for security and cross-chain communication. There are however a limited number of parachains available, as the relay chain increases with every parachain.

Cosmos

Cosmos uses what is known as the Inter-blockchain communication (IBC) protocol. Using this, Cosmos chains can communicate through the creation of certificates. If either chain cannot create certificates, interoperability through IBC cannot be achieved.

Cardano

Like Lisk, Cardano uses sidechain technology. Their solution works by having signed certificates sent from one chain to another, assuming the data can be confirmed by the receiving chain. The information in the certificate can then be validated and finally added to the chain.

The Future of the Web3 Interoperability

Web3 continues to develop and grow, with decentralization and increased security becoming more of a required expectation. A major factor that could affect the Web3 revolution is the ability to interoperate across a multitude of applications.

Interoperability will have an even greater focus in the coming years. Solutions will continue to be developed and updated, with Web3 interoperability being an essential part of these.