Why cross-chain technology is the next big thing in the crypto community
The internet of the past is much different from the internet now. The days of big, clunky computers using dial-up are long gone - now smartphones, tablets, and slimline laptops can connect to the web from almost everywhere.
Cassette tapes and CDs have given way to Spotify and Apple Music, mobile applications that can play and download music from anywhere with a cellular or Wifi connection.
According to some estimates, internet use has grown from 35 million users in 1995 (0.6 percent of the population) to over 4 billion users at the end of 2017 (53 percent of the population). What a difference a quarter of a century makes!
In the same way, many wonder what blockchain technology, often referred to as the new internet, will look like in 20 plus years. The relatively young industry has evolved tremendously since bitcoin went live in January 2009, and now there are a plethora of networks, applications, and protocols that would be unrecognisable just nine years ago.
And, like the internet then vs. now, there are emerging developments that will propel blockchain even further into the future. One example is the advent of cross-chain technology, which allows different blockchains to communicate and transact with one each other. Several companies are doing groundbreaking work in this area.
Fusion’s finance focused cross-chain platform
One relatively new blockchain project, FUSION, has the ambitious goal of creating a fully functional financial services platform. FUSION is a public blockchain devoted to providing cross-chain and cross-organisation solutions. In other words, it aims to create a way to transfer value between assets, whether centralised (stocks, bonds, other traditional financial assets) or decentralised (blockchain tokens and cryptocurrencies).
The FUSION network will accomplish its goals by letting APIs aggregate different blockchain tokens, off-chain values, and data sources into one public blockchain. Thus a variety of tokens and assets can be mapped onto the blockchain, making it possible to create multi-coin smart contracts so users from different blockchains can interact with each other on a trustless basis. FUSION is, in a sense, a “blockchain of blockchains”.
In terms of security, the platform implements a proprietary piece of technology called Distributed Control Rights Management (DCRM). DCRM distributes the control of private keys throughout the public blockchain.This ensures that no single entity can access the complete private key, and therefore no single node can take full control of the network’s digital assets.
WanChain, the network geared towards banking
WanChain, the network geared towards bankingLike FUSION, WanChain is specifically tailored to the banking and financial world. At its core, it is a framework for building a decentralised financial market. WanChain’s distributed infrastructure allows users to exchange assets across different blockchains, with its native token, Wancoin, serving as the intermediary for its exchanges.WanChain is also a distributed ledger that records every cross-chain and intra-chain transaction, keeping an immutable financial record. This is particularly useful for institutions likes banks and clearing corporations.As with FUSION, WanChain allows for multi-coin smart contracts and uses a distributed security protocol that ensures that one party cannot take control of the network’s private keys. However, it differs from FUSION in that it doesn’t provide off-chain data support, and is focused solely on crypto markets.
Polkdadot, enabling inter-blockchain communicationWhile FUSION and WanChain are focused on cross-chain technology specifically geared towards finance and banking, Polkadot is designed to enable scalable, decentralized computation. Its aim is more general in nature, focusing on blockchain interoperability and communication.In order to let different blockchains communicate with each other, the Polkadot Network has introduced the concept of a “parachain”. Parachains (short for parallelizable chains) are simpler forms of blockchains that attach to the security provided by a “relay chain”, rather than providing their own security protocols.
The relay chain guarantees the security of communication between parachains, allowing the parachains to perform independent computations. Thus parachains can operate in an efficient manner without being tied down to a blockchain specific language or virtual machine. The general nature of parachains makes them particularly well-suited for cross-chain communication.