The State of Blockchain Interoperability in 2021by@rafaelbelchior
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2,779 reads

The State of Blockchain Interoperability in 2021

by Rafael BelchiorMarch 25th, 2021
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Version 3 of “A Survey on Blockchain Interoperability: Past, Present, and Future Trends” is out. This survey depicts the state of blockchain interoperability as of March 2021, by collecting and analyzing 404 documents. Three main categories of solutions exist: Public Connectors (previously known as Cryptocurrency-directed approaches) and Blockchain of Blockchains. Hybrid Connectors, which provide cross-blockchain communication, are emerging solutions that will connect most types of blockchains, other DLTs and centralized systems.

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After nearly 9 months of work, version 3 of “A Survey on Blockchain Interoperability: Past, Present, and Future Trends” is out. This survey depicts the state of blockchain interoperability as of March 2021, by collecting and analyzing 404 documents. 

Three main categories of solutions exist Public Connectors (previously known as Cryptocurrency-directed approaches); Blockchain of Blockchains (previously known as Blockchain Engines); Hybrid Connectors (previously known as Blockchain Connectors).

Next, we will show a brief summary of the paper. Note that the full paper also contains:

  • 👉 Blockchain Interoperability Framework (BIF), allowing to classify and systematically compare existing solutions
  • 👉 Comprehensive background and related surveys (11 included)
  • 👉 Supporting Technologies and Standards (including ISO — International Organization for Standardization, IETF, Hyperledger, and IEEE), multiple-blockchain use cases, open issues and challenges, and more!

This table summarizes it all. In green, public connectors are “strategies across public blockchains supporting cryptocurrencies, including sidechain approaches, notary schemes, and hash time hashlocks”.

These include sidechains, notaries, and HLTCs. Interoperability techniques across public blockchains are well-known and widely used.

“Blockchain of Blockchains are frameworks that provide reusable data, network, consensus, incentive, and contract layers for the creation of application-specific blockchains (customized blockchains) that interoperate between each other.

We briefly present Polkadot and Cosmos , the most widely adopted Blockchain of Blockchains in terms of market capitalization”. Very interesting solutions, and quite promising.

Finally, Hybrid Connectors are “interoperability solutions that are not Public Connectors or Blockchain of Blockchains. Directed to both public and private blockchains, Hybrid Connectors attempt at delivering a “blockchain abstraction layer”, capable of exposing a set of uniform operations allowing a dApp to interact with blockchains without the need of using different APIs”.

These are emerging solutions that will connect most types of blockchains, other DLTs, and centralized systems. Hyperledger Cactus is a good example. 

How those three categories relate?

“Different categories of solutions approach the interoperability problem differently. Our paper firstly introduced Public Connectors in Section 5.1 and stressed their importance.

Token exchange is arguably no longer the whole scope of blockchain interoperability. Instead, various interoperability approaches emerged in the last years, whereby many of them aimed at generalizing blockchain interoperability.

In particular, emerging solutions can be categorized as Hybrid Connectors, which provide cross-blockchain communication, and Blockchain of Blockchains, which allow an end-user to create customized, interoperable blockchains at the expense of vendor lock-in. 

Public connectors are the most cited among industry and academia, as they provide practical solutions to real-world problems: asset transfers.

As these were the first solutions to emerge, not surprisingly, some may not succeed. It seems that the merge of sidechain and protocols relying on an escrow party (enforced by smart contracts) are the most suitable solutions for interoperability among public blockchains. We argue that the flexibility, decentralization, and security of such proposals can be utilized for secure interoperability.

However, creating and maintaining a decentralized application using several blockchains was difficult — and hence the Blockchain of Blockchains solutions appeared. Those can facilitate blockchain adoption while providing built-in interoperability among instances of the same platform, whereas variations of the solutions mentioned above can be used to bridge Blockchain of Blockchains to other blockchains.

While Blockchain of Blockchains, such as Cosmos or Polkadot provide a consensus engine and a security infrastructure to build blockchains, blockchain of blockchains aims at developing solutions using different infrastructures.

In particular, Cosmos and Polkadot might progress towards homogeneity, as they support only the creation of Tendermint-based blockchains and Substrate-based blockchains, respectively. While they provide interoperability capabilities, mainly on the chains relying on their technology and other desirable features (shared layer of security, decentralization, governance, better scalability), the end-users choice will be tied to specific implementations.

Paradoxically, such solutions might contribute to data and value silos, as solutions built with them cannot connect with an arbitrary blockchain. Despite this fact, one could argue that this problem can be alleviated by building bridges/adapters.

These solutions are promising but are challenging to integrate with legacy systems and, generally, private blockchains — and hence the hybrid connectors started appearing.

Hybrid Connectors, specifically blockchain migrators and blockchain of blockchains, progress towards a user-centric, blockchain-agnostic view, enabling enterprise-connected CC-dApps.

Arguably, the most suitable solution for connecting private blockchains is the usage of blockchain-agnostic protocols; however, they do not grant backward compatibility (as all previous solutions have to be adapted to integrate the adopted communication protocol).

To overcome this fact, the short-medium-term solution would be using trusted relays. An interesting way for trusted relays to venture is by decentralizing the escrow party: from a set of trusted validators to a network of public nodes.

It then follows from this survey that one could perceive trusted relays and blockchain-agnostic protocols to be good solutions to link private blockchains; and sidechain, smart-contract-based protocols suitable to solve interoperability among public blockchains.

A network of blockchain engine-powered blockchains can be leveraged using Hybrid Connectors. For instance, there is a possible synergy between Cosmos and the Interledger Protocol: when a user wants to make an in-app payment with fiat currency (e.g., dollars) within a Cosmos zone, he or she can rely on the interledger protocol as a payment rail. If using cryptocurrencies to pay (e.g., Bitcoin), the interledger router can route the transactions for a payment channel (e.g., Lightning Network), providing more trustful interaction.

To connect this ecosystem to private blockchains, bridges have to be developed. To make such bridges trustable, a possible solution would be to elect a group of validator nodes, via an overlay network, that participates in the consensus of public blockchains and private blockchains. 

This way, cross-chain, and cross-blockchain transactions can be endorsed. It is worth mentioning that several cross-chain programming languages are appearing, such as the Hyperservice Language and DAML.

DAML provides a unified Blockchain programming model by abstracting the underlying blockchains and exposing a higher-level abstract ledger on top, similarly to HSL. DAML has different integration degrees: DAML as an application on the target platform; and integration where the DAML runtime engine validates transactions.

Programs compiled on such languages can run on top of a BoB platform. To conclude this discussion, we recall to the reader that blockchain development has been done in silos since its inception. New solutions for blockchain interoperability started emerging as of 2017, and, perhaps not surprisingly, such solutions are also being adopted in silos.

While Public Connectors methods are commonly used nowadays, we focus on Blockchain of Blockchains and Hybrid Connectors. Blockchain of Blockchains and Hybrid Connectors allows interoperability between blockchains and other distributed ledger technologies and enterprise systems in the medium term.

This promotes the development of blockchain interoperability standards. While blockchain matures, industries will tend to incorporate this technology into their business processes. Then, we predict that mass adoption will follow.”

We are living exciting times.

What are your thoughts on blockchain interoperability?