All blockchains are different, but most use similar features to make transactions fast and protect users from data vulnerability. Bitcoin’s blockchain was made to secure the transaction record and maintain decentralization, while the Ethereum ledger supports smart contracts and the creation of decentralized apps.
Blockchains operate independently, but that doesn’t mean they can’t cooperate. That’s why some have specific features that are compatible with others. For example, the BNB chain supports the Ethereum network, which makes it efficient for them to communicate and exchange data. Their collaboration could influence the BNB price prediction 2030 due to increasing demand and popularity, so this feature benefits the entire ecosystem.
But should blockchains be compatible with others? And does this mean less decentralization? Let’s find out.
When they enable the interoperability function, blockchains can share data and exchange features or use cases. This can help improve and approach new technologies without the need for intermediaries, saving time and resources.
Blockchains communicating with each other can push for the adoption of Web3, as it's easier for these ecosystems to transfer value. That’s why cross-chain solutions are so important for their development: They can focus on independent evolution while supporting the industry.
Cross-chain communication includes sidechains, in which blockchains are built on top of each other, while oracles are bridges between blockchain so information can be shared. Cross-chain protocols and utility tokens enhance this communication.
The Ethereum Virtual Machine (EVM) operates across multiple computers on the Ethereum network, but its main purpose is to execute smart contracts. The machine maintains consensus and allows developers to create decentralized applications, non-fungible tokens and more.
However, the EVM is considerably necessary for blockchain interoperability, which is why more networks are shifting to compatibility to benefit from more incredible speed and low transaction costs. The EVM ensures interoperability through cross-chain bridges, which is why these networks are EVM-compatible:
While blockchain interoperability brings great opportunities for the industry, it’s not that easy to achieve. For example, blockchains can’t validate the state of other networks, which puts a risk to security and stability. The limitation is due to the oracle problem that consists in blockchain’s inability to pull in or push data from external systems.
At the same time, blockchains could also support an extended array of functionalities, including programmable token transfers or data oracles. Exploring new functionalities will help institutional clients adopt blockchain faster since it can align with compliance policies.
Security is still a prominent issue with blockchain interoperability, because the action opens the door to data exploitation. Network ledgers have different technologies in transaction finality, meaning the designs handle difficult transactions in contrary fashion.
Finally, standardization is an issue far from solved. Similarly, to the standards of the World Wide Web, blockchains should also follow a set of rules to allow communication to flow. In addition, blockchain standards could help with liquidity and support the adoption of cryptocurrencies as well.
Blockchains must communicate, and developers have established various solutions to address the issues. One of them is the introduction of cross-chains, which are protocols through which tokens and data transfer among blockchains. Projects like Cosmos and Polkadot were created specifically to act as communication bridges across other networks and support multichain interoperability.
Unfortunately, cross chain bridges have their vulnerabilities, being new to the market. Two of the most considerable attacks in the industry show us how they can be exploited. In the Ronin bridge from the Axie Infinity world, hackers controlled the validation mechanism and centralized it, leading to $600 million stolen. In addition, the Wormhole exploit involved Solana and Ethereum, whose bridge’s security was affected.
Some consider restaking a solution for cross-chain security. Users can reuse staked assets for multiple networks and enhance security. Pool validators contribute to reducing the need for intermediaries, which also supports scalability. For instance, the Cosmos project allows validators to restake assets on multiple appchains and allocate resources more efficiently.
The cross chain approach has considerable potential to improve the blockchain interoperability features. However, it can lead to the fragmentation of human capital since working across multiple chains requires considerable community resources and specialized developers. Therefore, the industry needs organization, which may pose problems of centralization yet again.
On the other hand, there’s also the problem of user experience because regular people are used to today’s internet interface, whereas blockchains and networks can be less easy to navigate. Hence, there’s an added effort to make the UX as appealing and approachable as possible, which can take some time.
As technology evolves and crypto and blockchain are closer to adoption, we’re optimistic that developers and talented people will take the lead into creating improvement projects. Scaling solutions will get better at supporting the growing demand for cross chain communication, such as sharding and rollups.
In addition, decentralization will be more heavily emphasized to help with data migration across bridges. This will ensure blockchain interoperability is secure. At the same time, adoption will increase the usability of the blockchain, bringing more access to users across industries.
Blockchain compatibility is the next level of what this technology can bring to the world. If we’d only thought about blockchains separately before, now we can use them at the same time to exchange data and value. Networks that communicate can strive for crypto and blockchain adoption faster than expected, which is why blockchains like the BNB Smart Chain and Avalanche support Ethereum integration. The EVM is also the most important element in cross-chain communication.
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