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Back to the drawing board: rethinking interoperability
Disclosure: The views and opinions expressed herein are solely those of the author and do not represent the views and opinions of the crypto.news editorial.
Imagine the scene: you are about to deposit your savings at a new bank. But as you fill out the forms, you come across a news story about a $624 million theft caused by a devastating exploit in the bank’s computer system.
You start looking at other banks to find a safer alternative, but things aren’t that easy. You see, there is no way to adequately differentiate or evaluate each bank’s back systems, and thefts are commonplace: in fact, a staggering $2.9 billion was stolen from banks due to similar problems to systems backlogged only between 2021 and 2023.
You would be forgiven for being a little hesitant about your next move!
It’s hard to believe, but the above is true. Except it’s not the banks that have suffered these embarrassing, high-profile breaches… it’s the chain crossbridges.
We’ve seen breaches caused by just about everything you can think of: from unexpected results due to overly complicated design to unexpected backdoors to outright fraud. The one common thread among all these incidents is that they are devastating for people who rely on cross-chain solutions and damage the reputation of blockchain as a whole.
However, when you look beyond the headlines, a powerful truth comes into focus: cross-chain infrastructure is core infrastructure. As long as we continue to believe that blockchain has the potential to change the world for the better – and that mainstream adoption remains the goal – cross-chain solutions are here to stay. So let’s take a frank and honest look at the current state of blockchain interoperability.
For those who don’t know, blockchain interoperability is key to remedying the fragmented and siled nature of blockchains. You see, blockchains, as trustless systems, are incapable of communicating with other blockchains without some kind of intervention. This is where cross-chain solutions come into play. Cross-chain solutions allow data from one blockchain to flow seamlessly to another. For users of dApps and defi protocols, interacting with cross-chain solutions is almost a necessity, as many of the most exciting and consequential projects are now being built away from projects like the Ethereum L1 blockchain.
Today, the state of blockchain interoperability is characterized by fractured incompatibility. Numerous competing interoperability projects each compete for dominance, creating bespoke cross-chain products of varying security and reputation that ultimately do nothing but plunder the blockchain landscape. This incompatibility between different cross-chain solutions remains one of the great ironies of blockchain. Worse, this incompatibility hinders the ability of users, businesses, and regulators to evaluate the security of each alternative, jeopardizing the widespread adoption of blockchain technology as a whole.
The solution to this is a shared framework for interoperability.
Blockchain interoperability cannot be the responsibility of a single project. An industry-wide effort is needed. Instead of adopting an “every man for himself” mentality, we need to come together and decide, once and for all, how we want to transmit, receive, and verify data from another blockchain.
Although some might argue, adopting a shared framework for interoperability does not necessarily threaten the business models of existing interoperability projects. Rather, it would simply form the basis for a highly secure core infrastructure layer upon which projects can build unique products that make different trade-offs tailored to different use cases. This is the differentiation that matters.
Returning to the initial scenario, the world of traditional finance has seen tens of thousands of banks carve out thriving businesses with loyal customer bases by relying on secure and shared infrastructures. Likewise, web2 companies around the world all rely on the Internet protocol suite: a shared framework that enables end-to-end data communication between distinct network devices over the Internet. A shared framework for interoperability, which clearly outlines architectural guidelines and interface definitions, is the clear path forward. Blockchain interoperability must be core infrastructure first, product second.
Temujin Louie
Temujin Louie is a communications specialist with more than a decade of experience driving the adoption of transformative digital technologies. His introduction to blockchain began in 2012 during his undergraduate studies at the London School of Economics and Political Science, where he studied the impact of Bitcoin on incumbent power structures. Temujin is an expert on blockchain interoperability. He has the rare talent of simplifying complex technological concepts into engaging narratives. Lui has been the essential bridge between the tech world and the broader public, offering his unique insights and strategic acumen to both tech startups and global multinational enterprises. Temujin joined Wanchain in March 2021 and serves as CEO of Wanchain.