Cross Chain solutions in simple words is a mechanism used to improve communication between two or more blockchain networks. Given today’s increasing count of number of blockchains in the market, users have come across many challenges and limitations which prevented them from truly taking advantage of blockchain technology.
Why do we need cross-chain solutions?
The most clearly visible challenge which seems to be root of all issues is clear lack of common interoperability mechanism. This prevents communication between different blockchain networks as each blockchain is built with distinct use-cases in mind resulting in highly varied strengths and weakness. There is also different degree of decentralisation making some blockchains more secure than other.
Trying to improve transaction throughput despite the limitations resulted in reduced security and decentralisation. To this extent, the community worked together to create various mechanism which facilitates communication between different blockchain networks enabling blockchain interoperability. This is achieved using cross-chain solutions which allows the service providers to integrate the strengths and weakness of multiple blockchain in a favourable manner to varied extent.
What is advantage of cross-chain solutions?
By integrating the strengths of multiple chains, we help address and resolve the inherent limitations which were present in the involved blockchain networks. This helps increase chain efficiency, decrease segmentation, reduce transaction and facilitate communication between the involved blockchain networks. This results in better utilization of blockchain tech’s use-cases helping gain maximum benefit and dig out full potential of blockchain ecosystem.
Some of clearly visible advantage of such a highly decentralised ecosystem are
§ Resolving scalability issues
§ Increased transparency
§ Develop highly customised web 3 services
What are the associated disadvantages?
While cross chain solution does help bridge the limitations by merging strengths of different blockchains into a single ecosystem, it is not a complete merger at the moment. As we are still in early stages of developing this technology, we are unable to address difference of trust and transaction rate bottlenecks.
Depending on size and security strength of different blockchains, the trust procedure involved in each chain could not be equal. This results in possibilities for manipulating data from chains which have weaker trust mechanism or low count of validation nodes.
There is also possibility to clog one particular chain in a multi-chain cross chain ecosystem as it could receive too many transactions from multiple chains at same time affecting scale of blockchain interoperability.
But, the technology still has immense scope and potential and given the continuous developments we see in market with each passing day, it is just a matter of time before the pros outweigh the cons. From perspective of both users and developers cross-chain solution is a huge boon to blockchain ecosystem and is likely to see increased adoption in the future.
