As new blockchain networks emerge to address specific needs of the technology, the interconnection of these unique blockchains becomes necessary. Who will lead the way to interoperability?
Every year, we see new blockchain networks being developed to tackle specific niches within certain industries, each blockchain having specialized functions based on its purpose. For example,like Polygon are built to have ultra-low transaction fees and fast settlement times.
Interoperability is not something that most blockchains have because each blockchain is built with different standards and code bases. Since most blockchains are naturally incompatible, all transactions must be done within a single blockchain, no matter how many features the blockchain might have. Harmann continued, “Consensus mechanisms on each blockchain decide the canonical history of all the transactions that were validated. This produces extremely large files that must be processed with each block and can only be viewed in the specific language native to the blockchain.
Interoperability can fix this problem by enabling users to use one token across multiple blockchains. In addition, by enabling blockchains to communicate with each other, a user can access protocols on multiple blockchains with greater ease. Because of this, there is a better chance that the industry’s value will continue to grow.“Interoperability is crucial because it's one of the key benefits to blockchain technology.