Inter-Blockchain Communication: The Key to Blockchain Mass Adoption
02 September 2022 - 2:53AM
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Blockchain’s stature is growing exponentially. Business spending on
blockchain is predicted to be $11.7 billion by Q4 of 2022 and one
of the prime factors for this is the increased importance of data
integrity, security, decentralization, and reliability in
operations. As more businesses and people start to grow aware of
blockchain’s transformative potential, it is undoubtedly said to
reach new milestones. Web 3.0 firms have been spearheading
innovations in the crypto space and are germinating Blockchain into
the very heart of organizations’ business processes and are adding
significant value in enterprise solutions. Several DLT ecosystems
and applications have emerged to meet the niche needs of industries
and offer solutions to a range of use cases. Despite this,
blockchain is yet to witness mass adoption. Part of this slow
adoption can be attributed to the technology’s inherent traits:
that it occurs very gradually until 8-10% before exploding in
usage. However, a major cause of this holdup can be attributed to
the fact that blockchains and dApps lack the ability to connect,
transfer data and interact with other chains. This is known as
‘interoperability’. Interoperability: The Tipping Point To Mass
Adoption Blockchains, as they stand today, are self-contained
ecosystems. Each chain is independent, has its own set of codes,
and is not readily readable by another blockchain. Practically,
this means that the features and benefits of blockchain ‘A’ are
available to users who ‘lock in’ to chain A’s ecosystem. Users
would not be able to access their data (like assets, holdings,
files, and value) on any other chain. This could not only cause
centralization of access and control in a particular blockchain but
also deprive the user of the benefits that another blockchain may
be able to offer. And that is why Interoperability matters. It lets
one blockchain communicate, read the data from another blockchain
and share information. Enterprises have multifarious needs in any
given transaction that necessitate multiple networks working in
tandem with each other. As the report by the World Bank and IMF
highlights, there is an imminent need for blockchain
interoperability in the context of business operations and the
digitalization of trade and e-commerce. Especially in the realm of
decentralized finance, having opportunities to access value across
chains can allow liquidity pools to be adequately utilized. Take
for instance cross-chain protocols like Konstellation, which aim to
efficiently connect funds across chains. All in all,
Inter-Blockchain Communication (IBC) will allow chains and on-chain
applications across networks to interoperate securely without the
need for one-on-one integration and expensive costs.
Interoperability allows leveraging the best of all worlds by
horizons of application and helping blockchain reap its true
potential. Towards A Collaborative, Interconnected Future In an
effort to close the gap between the various blockchains, an
increasing number of interoperability initiatives such as Polkadot
and Cosmos have emerged. They want to make it easier for networks
to interconnect and make sure that decentralization is completely
realized. IBC can enable the direct use of assets locked in one
network in another without impairing each others’ economic
prospects in industries like DeFi. In that vein, Konstellation has
stepped into the DeFi ring with a strong purpose: to allow
cross-chain liquidity in the capital markets segment. The project
aims to enhance the composability of DeFi markets, make crypto
assets more accessible, and the transfer of assets between chains
smoother. Their platform will unite the fragmented segments of the
blockchain industry, be it NFTs, cryptocurrency liquidity, or other
crypto assets. ✨KONSTELLATION Network is a blockchain protocol,
built on Cosmos Network SDK, creating a global infrastructure for
the future of the decentralized capital markets.
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