"The Internet is a network of free circulation of information, while the blockchain is a network of free circulation of value". This is a good vision for the blockchain. At present, the blockchain is not yet able to communicate efficiently and is not yet a network of free circulation.

Analogous to the computer network that existed in the form of local area network in the 1960s, which could not be interconnected with computers outside the scope of local area network. Until 1969, the Advanced Research Projects of America (ARPA) put the four-node ARPAnet into use, which was the first time that computers had the networking capability in homogeneous environment.

When time advanced to the birth of TCP/IP protocol in 1980s, which enabled heterogeneous networks to interconnect with each other and accelerated the outbreak of the Internet. Return to the blockchain. With the continuous development of technology, a large number of projects have emerged, but most of them are in a highly heterogeneous state. In the early stage of development, more attention was focused on their own technological innovation and ecological construction, and the network was gradually isolated by subgroups with their specific interests.

At the same time, as a large asynchronous distributed network, it is difficult to design a "unified" chain. Each project party will make trade-offs at different technical levels. Under specific scenarios, such as security, privacy, efficiency, etc., it will provide its own advantages, which will ultimately make it difficult for the application layer to maximize its value on a single chain.

Therefore, in the current situation of multi-chain coexistence, the interoperability of blockchains will become important and full of significance because it can bring free flow of value and promote inter-chain cooperative work. It is a powerful driver for the large-scale development of blockchains towards network effect.

What is the interoperable blockchain? We can literally explain it. First of all, let's talk about interoperability. The Institute of Electrical and Electronics Engineers (IEEE) has defined it as follows:

It is the ability to exchange information between two or more systems or components and to use the information already exchanged.

When it comes to the blockchain, the National Institute of Standards and Technology (NIST) has made the following explanation:

An interoperable blockchain architecture is a composition of distinguishable blockchain systems, each representing a unique distributed data ledger, where atomic transaction execution may span multiple heterogeneous blockchain systems, and where data recorded in one blockchain are reachable, verifiable, and referenceable by another possibly foreign transaction in a semantically compatible manner.

Simply put, interoperable blockchain is the atomic transactions that can be performed between different chains, and the data involved in the transactions can be accessed, verified and used. Although the definitions and explanations are not unified, most of them focus on the interoperability between different chains, so there is another more easily understood and widely quoted noun for this --- Inter-Blockchain

Is blockchain interoperability equal to inter-blockchain? I think that the former includes the latter. If one focuses on exchanging information between different chains, it can be called inter-blockchain. Inter-blockchain can be divided into encrypted asset interoperability and state event interoperability according to the types of exchanged information.  If the scope is expanded, there is also a need to exchange information between the world of the blockchain and the real world outside the chain. As the blockchain itself is a closed, deterministic and autonomous system, it is completely isolated from the real world, so the interoperability between the worlds in the chain and out of the chain is equally important. Combined with inter-chain and on-and-off-chain interconnection, the final blockchain network can support the interoperability function of application layer system, which is conducive to increasing the network effect.

Regarding the technical implementation of interoperable blockchain, Ethernet founder Vitalik Buterin mentioned three main methods in the research report on interoperable blockchain, namely hashlock, notary schemes and relay. The relay problems can be further divided into side chain and relay chain.

Hashlock is applied to encrypt asset interoperability between double chains. Hashlock and timelock are used to ensure the atomicity of inter-blockchain transactions, i.e. transactions can only be completed if certain time conditions and hash conditions are met. The general implementation flow is as follows:


Assuming Alice in chain A and Bob in chain B exchange encrypted assets, the successful completion of the transaction requires six steps:

1. Alice randomly generates a key S and calculates a hash value H for the key;

2. Alice sends hash value H to the smart contract on chain B;

3. Alice locks the traded assets on chain A, sets the locking time Y at the same time, and sets the logic that the locked asset can be obtained when the key S is provided.

4. Bob locks the transaction asset on the smart contract of the chain B , sets the locking time X (X<Y), and sets the logic that the locked asset can be obtained when the key S is provided.

5. Alice sends the key S to the chain B contract within the locking time X, and the contract determines hash(s) == h, that is to unlock Bob's assets to Alice, while Bob acquires the key S;

6. Bob sends the obtained key S to chain A within the locking time Y, unlocks Alice assets, and both parties complete the inter-blockchain asset exchange.

If Alice does not send the key S to the chain B smart contract within the limit time X set by Bob, Bob can restore the previously locked assets;  If Bob does not send the key S to the chain A contract within the limit time Y, Alice can recover the previously locked asset.

Notary scheme is composed of one or a group of trusted nodes as notaries, monitoring inter-blockchain transactions between chains, and verifying the validity of collected inter-blockchain transactions. Both parties rely on notaries to realize inter-blockchain operation. According to the composition of notaries and their signature methods, they can be divided into three types of implementations:

Single Signature Notary Scheme . Notaries are appointed by a single designated node and use a centralized way as credit guarantee to convert trust technology to traditional credit intermediary.  

Multi-signature Notary Public Scheme,  Multiple Notary Public Nodes Sign in their own ledger. Inter-blockchain transactions can only be verified and approved after reaching a certain proportion or number of consensus. 

Distributed Signature Notary Scheme,  The system adopts the distributed signature based on multi-party computing, the system splits the unique key into key fragments and sends them to each notary node. inter-blockchain transaction can only pass verification after a certain proportion of notary nodes sign together for confirmation.

A side chain is a blockchain that can verify data from another chain without relying on a third party. Generally, digital assets can be locked in the main chain through a two-way peg mechanism, which can release the equivalent digital assets in the side chain. Similarly, when equivalent digital assets are locked in the side chain, the digital assets of the main chain can also be released. The general scheme is to realize decentralized two-way peg with simplified payment verification (SPV). SPV is a method that can verify the existence of a transaction in a specific block through a small amount of data, which can ensure the effectiveness of cross-chain transactions.

In essence, the relay chain can be seen as the fusion and expansion of notary scheme and side chain. In short, when a side chain connects main chains and acts as a hub to conduct inter-blockchain transactions between main chains, it can be directly used as a relay chain. Therefore, the relay chain will generally undertake the work of verifying and participating in inter-blockchain information exchange, thus ensuring safe inter-blockchain transactions between the two chains. From this perspective, the relay chain is also a decentralized notary scheme, which, in combination with the connection scheme of the side chain, completes the verification and transfer of inter-blockchain transactions at both ends of access.

The common technologies for blockchain interoperability are briefly introduced above. To sum up, hashlock and SPV side chain technology can minimize trust, i.e. only rely on the self-security of the participating chain, notary scheme needs to find most trusted node organizations, while general relay chain technology relies on most honest verifiers.  Regarding the type of cross-chain messaging, hashlock is relatively limited and only supports the exchange of encrypted assets between double chains, while the other three technologies are not limited.

Through the comparison of technologies, we can see that in the early stage, the interoperability of blockchains focuses on the scene of solving the interoperability of double-stranded assets, so we propose technologies such as hashlock, notary scheme, side chain, etc. As time goes on and the technology continues to pave the way, the scene gradually changes from the interoperability of double-stranded assets to the free circulation of the full state between multiple chains. At the same time, relay chain, a technology that integrates notary scheme and side chain, gradually shows its influence in the new blockchain interoperability platform.

Let's talk about the interoperability of alliance chain separately. As we all know, the current development of blockchain is divided into public chain and alliance chain. The two have different "values" and different meanings of interoperability. For the former, because it carries encrypted assets and has no access threshold, advocates decentralization, its interoperability can realize free circulation of assets.  The latter one has an access threshold, which mainly carries the data that have passed the consensus among the alliances, therefore, the interoperability of the alliance chain will be related to the coordination of the data states among the organizations.

However, the current blockchain interoperability focuses more on the public chain, and there is relatively little public research and attention on alliance chain interoperability. The reasons can be summarized as the following three points:

1. The technological framework of different alliance chains is quite different, and there is not much communication and interaction between communities. It is difficult to achieve the unification of core technologies at the upper level.

2. Alliance chain is a chain of license blocks. If inter-blockchain transactions occur between two independent license chains, security risks will be introduced to the systems of both parties, i.e. the focus is how to ensure the transaction security requested by external chain, how to prevent inter-blockchain transaction attacks, and how to verify the effectiveness of the transaction status on another closed chain. All these problems require the alliance to reach a consensus before interoperability or there exists a third party organization that both parties rely on as an intermediary, for which now there are barriers in communication and technology.

3. If inter-blockchain collaboration is needed between alliance chains, a unified alliance chain framework can be selected after forming an alliance. Due to the compromise, interoperability between the current alliance chains is not a necessity.

Of course, with the continuous enrichment of the applications carried by the alliance chain, the interoperability of the alliance chain will also bring about network effects, which will help to break through the isolated islands of data among the alliances, the importance of which cannot be ignored. However, the current difficulty lies not only in the technical level, but also in the lack of upper-level cooperation as a driving force, resulting in relatively slow development and research of current technology.

In a word, the development of blockchain interoperability is experiencing continuous integration and expansion of various technologies, focusing on the scene from simple to difficult, and moving forward in coordination of theory and practice. We can see that the network effect of blockchain is emerging. However, there is still a need for technical convergence design for related components, such as unifying input and output ways of inter-blockchain messages for each chain, constructing a unified message format, designing and unifying efficient and verifiable data structures, etc.  To improve the user experience of application layer interaction, when interoperability breaks the "one chain, one coin" requirement, multi-chain state management of application layer will be put forward.  Improve the cognition of the real world interoperability between the on-chain and off-chain to understand that interoperability is not equal to inter-blockchain. Finally, the author believes that the continuous research of practitioners will accelerate the continuous breakthrough of technology, bring about continuous iteration and innovation of application, and bring about a large-scale future of blockchain network effect.

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