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2. Intermediate Course

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  1. 1. Ethereum 2.0 - What is it? 
  2. 2. What is cryptocurrency burning?
  3. 3. How to create your own cryptocurrency? 
  4. 4. Blockchain Oracle - what are oracles? 
  5. 5. How to make money with NFT?
  6. 6. What is an ERC20 token and how is it created?
  7. 7. The Metaverse – a new virtual world
  8. 8. Metaverse – TOP 15 virtual reality projects
  9. 9. Technical analysis – is it worth using?
  10. 10. What are DeFi liquidity pools?
  11. 11. Second layer (layer 2) - what is it? 
  12. 12. What are wrapped tokens 
  13. 13. What is the Lightning Network, and how does it work?
  14. 14. What are security tokens?
  15. 15. What is Play-to-Earn (P2E) and how does it work?
  16. 16. What are Social Tokens? 
  17. 17. Examples of the use of WEB3 on the blockchain
  18. 18. What is Web5? 
  19. 19. Ethereum London Hard Fork - what is it ? 
  20. 20. Segregated Witness - what is Segwit Bitcoin all about?
  21. 21. Polkadot - Decentralized blockchain and DOT cryptocurrency
  22. 22. Polkadot Parachain - Next-generation blockchain
  23. 23. Trading order types: stop loss, trailing stop loss, LIMIT
  24. 24. Set up of Stop Loss and Take Profit orders
  25. 25. What are Decentralized Cryptocurrency DEX Exchanges?
  26. 26. What is Curve Finance?
  27. 27. What is GameFi and how does it work?
  28. 28. Non-fungible tokens and NFT exchanges
  29. 29. Cryptocurrency steps - What is move to earn M2E?
  30. 30. What is Proof of Reserves (PoR)? How does it work?
  31. 31. Interoperability in the world of cryptocurrencies and blockchain
  32. 32. Blockchain and its layers - What is layer three in Blockchain (L3)?
  33. 33. What is Layer 0 in Blockchain technology?
  34. 34. What is layer 1 in Blockchain?
  35. 35. What is MakerDAO and DAI Stablecoin?
  36. 36. What is Blockchain sharding?
  37. 37. What is the NFT licence fee?
  38. 38. What is the SubDAO protocol, and how does it work?
  39. 39. The main differences between static NFT and dynamic NFT
  40. 40. What is minting an NFT?
  41. 41. Mainnet versus Testnet on the Blockchain. The complete guide!
  42. 42. What are NFT Ordinals? A guide to Bitcoin NFT.
  43. 43. Market Cap versus Fully Diluted Market Cap - the most important differences you should know!
  44. 44. MINA Protocol: the lightest blockchain in the world!
  45. 45. NFT Gas Fee - what is it? How can you reduce your gas fee?
  46. 46. Liquidity Provider Tokens (LPs). What are they, and why are they so important?
  47. 47. What is KnowOrigin NFT, and how does it work?
  48. 48. What is decentralized social media?
  49. 49. What is the Ethereum Name Service (ENS) and how does it work?
  50. 50. Arbitrum: Ethereum scaling solution - everything you need to know
  51. 51. Ethereum ERC-4337 - what is it and how does this standard work?
  52. 52. Sustainable Blockchain - Proof of Useful Work & Flux
  53. 53. Ethereum Proof-of-Stake (PoS) - what should you know?
  54. 54. Atomic Swap: What is an atomic swap, and how does it work with cryptocurrencies?
  55. 55. What Is Cryptocurrency Vesting? What Are Its Advantages?
  56. 56. What Is the Metaplex Candy Machine Protocol? How Does It Work?
  57. 57. What Is the BNB Greenfield Ecosystem?
  58. 58. Real Yield in DeFi - what is this trend? What does it consist of?
  59. 59. What Is Slashing in Cryptocurrencies?
  60. 60. How to Create Your Own Decentralized Autonomous Organization (DAO)?
  61. 61. The ERC-721X VS ERC-721 Standard – Key Differences!
  62. 62. Royalties – What Are They? How Does This Type of Licensing Fee Work?
  63. 63. Polygon 2.0 - the value layer for the Internet
  64. 64. ERC-6551 - the new NFT standard. What does it bring to the non-exchangeable token sector?
  65. 65. What is TradFi? The importance for cryptocurrencies!
  66. 66. What is the Real World Asset (RWA) trend in cryptocurrencies? Explanation and examples!
  67. 67. Pyth Network: a powerful oracle harnessing the power of Solana!
  68. 68. Vampire Attacks in Decentralized Finance (DeFi): Explanation and Examples
  69. 69. What are stables in the world of cryptocurrencies?
  70. 70. What Is Binance Oracle?
  71. 71. What is NFT Lending all about? An innovative solution in the world of cryptocurrencies!
  72. 72. Shibarium: A new era in the Shiba Inu ecosystem?
  73. 73. What is an ETF? How will an exchange-traded fund on bitcoin work?
  74. 74. Symmetric and asymmetric encryption - key cryptography techniques!
  75. 75. Cosmos SDK: Building the Blockchain Ecosystem
  76. 76. DAO Investment: A revolution in the world of finance and investment
  77. 77. What is cross-chain interoperability in Blockchain technology?
  78. 78. Blockchain trilemma - explanation of the problem. What is the impact on cryptocurrency payments?
Lesson 31 of 78
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31. Interoperability in the world of cryptocurrencies and blockchain

Interoperability is an essential part of the cryptocurrency industry. Daily, it enables networks and blockchain protocols to communicate with each other. This allows everyday users to engage even more with blockchain technology. Why is interoperability so important in the world of cryptocurrencies and blockchain technology?

New blockchain networks are being created every year. They solve the problems of specific niches, and each has specialized functions tailored to its purpose. The rise of blockchain is also a confirmation that there is no single solution that will meet all our needs. Therefore, as we realize the growth of this technology and its capabilities, connecting all blockchains and networks, becomes a necessity. And here comes another solution: interoperability.

Interoperability – definition

It is the ability of systems, devices, applications, or products to connect and communicate with each other in a coordinated manner. This includes data transfer or collaboration. Interoperability helps achieve higher performance. We distinguish:

Syntactic interoperability – includes systems that can communicate effectively with each other, using simple formats (XML and SQL) and protocols. It is often referred to as structural interoperability.

Semantic interoperability – the ability of systems to automatically exchange and accurately interpret information. It is achieved when the structure of data and its codification is uniform for all systems involved.

Cross-domain or inter-organizational interoperability – is the standardization of practices, policies, fundamentals, and requirements of systems. It focuses mainly on the non-technical aspects of interoperability within an organization.

Data exchange between applications, databases, systems, etc. is the key to the development of modern technologies.

Interoperability of blockchain technology – what is it?

Furthermore, it refers to the many methods used to connect multiple blockchains. It allows them to communicate with each other, share digital assets, databases and collaborate more efficiently. Interoperability also enables the transfer of data and assets across different blockchain networks, using decentralized cross bridges.

As most blockchains are built from different standards and codes, interoperability among them is not common. As a rule, “natural” blockchains are incompatible and transactions are performed within one of them.

In the crypto industry, interoperability can be understood as the freedom to exchange data. Current protocols cannot effectively communicate with each other. Ethereum or Cosmos, which are tier one protocols, have intelligent contracts built in, which allow secure data exchange only within their ecosystems. We have written about smart contracts here, so we will not dwell on this topic.

Not surprisingly, organizations that want to work based on blockchain are demanding its interoperability. All because of the benefits that come from cooperation in this area.

Why is blockchain interoperability so important?

Given the wide variety of blockchain ecosystems, it is essential that the two on-chain environments work together. This is a significant feature, especially for developers who want to build cross-chain/modularized applications (these applications unify the fluidity of multiple on-chain environments). Interoperability is equally significant for application developers who would like to take advantage of the unique strengths and features of each blockchain.

However, there is more to it than that. Blockchain interoperability protocols are equally valid for traditional systems that need to interact with other, different blockchains. Such an interoperability protocol is the basis for building a blockchain layer that will enable traditional back ends and dApps to interact with any on-chain environment, through a single solution.

Interoperability also solves another problem – it allows users to use a single token across multiple blockchains. What’s more – blockchains will communicate with each other, making it easier for users to access multiple protocols on multiple blockchains.

Interoperability vs. cryptocurrencies

It is worth noting that interoperability does not only refer to connectivity between blockchains. Protocols and some smart contracts are also interoperable. For example – the T3nr platform allows intelligent contracts to operate on multiple blockchains. How? The contract is hosted on the smart contract platform, then deployed and executed on different blockchain networks.

Such interoperable smart contracts allow developers to create cross-chain applications and users to conduct cross-chain transfers. What’s more, with such a solution, users can access multiple decentralized applications without having to change networks. You can read about how decentralized apps work here.

Oracles, which we have also written about. This is another protocol that can benefit from interoperability. As a reminder – oracles connect the real world, with the virtual world. They use smart contracts to do so. Decentralized oracle platforms, can connect them to multiple blockchain networks. They then allow blockchain to share data from the real world.

Interoperability is also an important element in the exchange of digital assets, between blockchain networks. The most common way this is done is through the use of cross-chain bridges. Bridges allow tokens to be transferred from one bridge, to another.

Summary

Interoperability is a key aspect in the blockchain industry. It is a kind of key to success. Interoperability reduces the barrier to entry for users who want to engage with multiple networks simultaneously.

Moreover, interoperability will increase efficiency across the cryptocurrency sector. Users will be able to move their assets quickly and flexibly between blockchains. Instead of being tied to a single blockchain, smart contracts will be able to operate across multiple networks. Interoperability should thus form the basis for the use of blockchains.