What is Interoperability?

May 20, 2021 1 min read

Interoperability is an umbrella term which refers to a category of technologies and projects that aim to make distinct blockchain networks inter-operable. The goal is to build a continuous financial experience across various networks (such as between Bitcoin and Ethereum), which potentially run on a variety of native assets, consensus algorithms and token standards. This is of crucial importance if cryptocurrencies are to reach a global scale and be a realistic alternative to traditional finance.

One thing to watch out for in the attempt to make blockchains interoperable is the characteristic of decentralisation. Decentralisation is the very basis of the cryptocurrency movement, and ensures that the problems that plague centralised economic systems today do not carry over to those of tomorrow. In practice, we have to be vigilant if the entities offering interoperability solutions are adhering to keeping their systems decentralised and democratic. It is relatively simple to create systems that allow communication between blockchains and perform well, but run based on the validation of only a few central authorities.

Examples of projects working on blockchain interoperability include Polkadot, Loom and Cosmos.

Great! Next, complete checkout for full access to Stake DAO Academy.
Welcome back! You've successfully signed in.
You've successfully subscribed to Stake DAO Academy.
Success! Your account is fully activated, you now have access to all content.
Success! Your billing info has been updated.
Your billing was not updated.