There Are Cross-Chains In Your Blockchain Future

cross-chain interoperability

Are you wondering why it is taking so long for blockchain to become as ubiquitous as AI or IoT? One of the biggest stumbling blocks (pardon to pun) is that Bitcoin, Ethereum, Cardano, and the vast majority of other blockchains are proprietary ecosystems (walled gardens) that cannot easily share data or exchange value with other blockchains. This is not a new problem, but there are new, well-funded solutions emerging with exciting roadmaps that point to explosive growth in the near-term. Here’s a quick overview of some projects that have my attention.


An Example Problem

For a variety of reasons, exchanges do not list every cryptocurrency and every wallet is not compatible with every kind of token. So, if I want to exchange CoinA for CoinB, I may have to go to an exchange where CoinA and CoinC trade, and exchange my CoinA for CoinC. Then, go to an exchange where CoinB and CoinC trade, and exchange my CoinC for CoinB. This is time consuming and expensive. Look at how many trades (and associated transaction fees) are involved. To expand this example, you can substitute NFT for CoinA, and your digital wallet for CoinB, and think about how to take digital custody of (or trade) an NFT.


Some Early Solutions

Early solutions such as “atomic swaps” solve part of this problem using time-bound smart contracts called HTLCs (Hash Timelock Contracts). But there are several problems with atomic swap exchanges (Google “double-spend attacks” and “Uniswap” if you want to dig a little deeper).

There are a few very clunky cross-chain bridges available. If you want to understand just how much knowledge is required to implement a cross-chain bridge between Ethereum and Polygon (which are considered highly compatible), have a look at the payout schema for ethermine.org, the second largest ETH mining pool. With all due respect to my 87-year-old mother, she’s not going to go through this process to save a few GWei and neither is any other average consumer. (BTW, Polygon is the rebranded Matic Network and its goal is to be Ethereum’s internet of blockchains. Clearly, they have some work to do.)

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Disclosure: This is not a sponsored post. I am the author of this article and it expresses my own opinions. I am not, nor is my company, receiving compensation for it.

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