The first-generation blockchain, Bitcoin led the way in the creation of numerous alternative currency platforms as the first generation of blockchain technology.
In late 2013, Vitalik Buterin proposed what it would be known as the second generation of blockchain: Ethereum, the project came to live in July 2015. Ethereum introduced the ability to build application-specific logic upon a blockchain network. This enabled new capabilities beyond transactions to incorporate state, business logic, and multi-party contracts to be stored and executed on a blockchain and written to an immutable ledger.
In the initial days, there was a belief that everything on the blockchain should be done with one single chain. Which is why probably Bitcoin or Ethereum came up with one main network. Where multiple applications for different use cases can be deployed on one network. But later researchers realize that the idea of one blockchain maximalism is not the right solution.
At the beginning of 2017, many leaders in this space realized that one blockchain maximalism is not the right solution. And following are the reasons behind it :
- Scalability : when the number of users increases.
- Everybody operated on one chain with a set of predefined rules to follow, which may not be helpful for some of the use cases as they have to follow the same network consensus and they can not modify it.
As a result, multiple blockchains are out there for specific use cases, for example, blockchain specific for commerce, blockchain specific for healthcare, blockchain for identity management and so on so forth.
But the questions is if there are multiple blockchains out there they should talk to each in order to exchange data/information. Like, say for example, app A is built on blockchain A and app B is built on blockchain B, and if app B needs some data which is present in app A, then there has to be some way (hub may be) to connect these blockchains in order to make them talk and transfer value from one chain to another.
We are looking at a network of blockchains, built on some standardised way, which is interoperable and allows blockchains to speak with one another inorder to exchange information. But to make this possible, they have to be built in a standardised way. If technology can achieve this, then people can speed up innovations in individual blockchains which also means that blockchain can talk together and scale together.
This is what cross-chain-protocol is seeking to do. Let’s look into some of the cross chain protocols that are being developed.
Cosmos is a decentralized network of independent parallel blockchains, each powered by classical BFT consensus algorithm like Terndermint.
It is built to allow many independent blockchains – public and private to communicate and exchange value with one another.
Cosmos can interoperate with multiple other applications and cryptocurrencies. By creating a new zone, you can plug any blockchain system into the Cosmos hub (first blockchain deployed on cosmos network) and pass tokens (different) back and forth between those zones, without the need for an intermediary. Cosmos use proof of stake for their consensus. Components of Cosmos :
- Tendermint: it is a low-level general-purpose blockchain engine which is based on BFT protocol. Its a kit for building blockchain.
- Zones: blockchains are referred to as Zones in Cosmos network.
- Hub: on top of Zones, there is something called Hub, which is kind of coordinator which manages the communication between all the other Zones. This itself is a blockchain.
- Atoms: native token for cosmos network for validators. They are also used for paying transaction fee from transferring values from one chain to another.
Like Cosmos, Polkadot is network or protocol for connecting ledger. Similar to Cosmos, which allows values transfers across chains but in addition to that is also allows the smart contracts to exchange data from one chain to another. Where cosmos refers their chains as Zones, Polkadot refers their chains as Parachains.
It allows new designs of blockchains to communicate and pool their security while still allowing them to have entirely arbitrary state-transition functions. This opens to the door to a network of blockchains, where private and consortium chains can be firewalled from open and public chains like Ethereum without losing the ability to communicate with them.
Components of Polkadot :
- Parachains: blockchains are referred to as Parachains, as I mentioned.
- Relay chain: Just like Hubs in Cosmos, Polkadot has Relay chains, is the central Polkadot blockchain which connects Parachains. In short, coordinates consensus and transaction delivery between chains.
- Bridges: Links to blockchain with their own consensus. Meaning they can run with their own consensus without using Polkadot network’s consensus but still able to participate in Polkadot network using bridges. Example, Etheruem.
More about Polkadot in here.
There is one more such protocol which is under development and you might wanna look into, called InterLedger. But I personally found Polkadot, a very interesting project to research as it allows smart contracts to talk to each other cross chains.