Every time I use my mouse or simply my keypad—I am engaging an interoperable system. My device—the keypad or the mouse—needs to talk to the motherboard, that is it needs a software program that interfaces the hardware device with software so that I can see what I am typing on my screen, or what graphic I need to tap on my smartphone.
Business will often need to use an interface among various databases that they do not own. For example, one medical center may need to access a patient’s record in a different department, or from a doctor’s visit across town.
When addressing blockchain, Fares Alkudmani in Quora says that “interoperability refers to the capacity to share data freely across blockchain networks.” This article reviews the state of blockchain interoperability.
One area of interoperability that comes to mind is the Internet of Things, or blockchain IoT. That is the ability for blockchain technology to be applied to an Internet based device and blockchain use. UrIoTNews identified areas where blockchain is being challenged.
Hundreds of blockchain platforms have been launched in recent years, all working to solve various industry issues or problems with blockchain technology. However—only a “limited number of these platforms are built with the capability to interact with each other.” (UIoTNews). The result of which is that each blockchain has a different set of transactions and they are managed differently. Developers building smart contracts for one blockchain cannot easily port it to another platform because it lacks interoperability.
The very nature of blockchain makes it challenging in making a genuinely interoperable platform. In the end, it is this lack of interoperability that has the potential to hold back widespread adoption of blockchain when a project requires accessing one blockchain network with another.
According to UrIoTNews, for example, “to transact an asset across chains, users have to go to an exchange, trade the asset, and then withdraw and move it to a new chain. Without interoperability, the original intentions of blockchain being decentralized network are lost.” The majority of blockchain networks and ecosystems are designed to offer specific options and features with the ability to make payments, or to store and trade assets—among others.
The problem—as far as the current state of the technology exists, is that they are being offered in isolation, they are siloed and the ecosystems are not designed to talk to each other and can’t share data across networks. According to Sumit Kumar, writing for Capgemini—if blockchain networks are to make a strong case for their adoption, they will have to work with each other and offer a seamless integration and capabilities to their users.
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As blockchain projects are being developed, interoperability needs to be a part of the development if the company is to gain user acceptance. Interoperability provides users a much more useful and user-friendly experience. It gives the end-user a seamless integration of capabilities offered by the blockchain ecosystem. For example, says Kumar, a “user will be able to tokenize the asset (e.g. artwork) over Ethereum based DApp, will be able to transfer the tokenized asset to another address over Cardano, and pay any corresponding transaction fees over the bitcoin network.”
While the blockchain community has identified a need for interoperability to work from one network to another—is standards. However, developing and achieving standards has remained elusive.
Early adopters of blockchain technology, in particular fintech institutions, have been forced to analyze data offline; that is, not on the blockchain. This is primarily because of the lack of a standard query language, latency in data access, and a lack of interoperability between “analytics and data visualization tools with multiple blockchain protocols,” says George Leopold for Enterprise AI.
A study by the TABB Group notes that data is the lifeblood of capital markets, and indeed every industry is dependent on up to date, relevant and accurate data. The study found that having to analyze blockchain data in an off-line manner is “neither ideal nor sustainable. Required will be an on-chain approach to extract full value and competitive advantage of enterprise blockchain.”
Articles are circulating on the need to create standards for interoperability from such notable organizations as IEEE, and a report by The European Union Blockchain Observatory and Forum are calling for standards. Indeed, if blockchain is to succeed across ecosystems, interoperability is a must.