Past, present and future of blockchain applications -- interoperability is key
The year 2020 is the first year of industrial blockchain. With the continuous development of blockchain technology, the number of enterprises actively laying out blockchain is growing exponentially. However, blockchain is still in a very early stage of development, and the application of blockchain is still in need of continuous exploration. For more than a decade, blockchain technology has had a wide impact on a global scale. The landscape of the blockchain industry has changed dramatically since its inception. In the last few years, the blockchain market was more like the Internet before 2000, which experienced a period of turbulence and had some ups and downs, and then really strong companies developed.
Back in 2018, the blockchain ecosystem was completely different from what it is now. Back then, it was more conceptual. Much has changed in the blockchain industry since last year. More and more credible projects are born. In addition to its initial limited use in the digital currency space, blockchain technology has gradually become the infrastructure of different traditional industries. After more than a decade of exploration and development, blockchain has also found more applications that can highlight its value.
Growth continues, but large-scale adoption has yet to materialize
With the continuous development of blockchain technology, the number of companies actively deploying blockchain has grown exponentially. In the context of the COVID-19 outbreak, blockchain technology also shows its great untapped potential.
Over the past year, global blockchain companies have continued to grow, but at a slower pace. According to the Blockchain White Paper (2020), as of September 2020, there are 3,709 blockchain companies in the world, mainly distributed in the US and China, of which the US accounts for 27% and China accounts for 24%.
Obviously, as countries around the world continue to introduce favorable blockchain policies and promote blockchain technology to empower the real economy, the blockchain industry bubbles out and the industry also returns to rationality. More and more enterprises are running into the field and actively using blockchain technology to expand their business.
Blockchain is still in a very early stage of development, even though blockchain-related companies are springing up like mushrooms. At the lowest level of the protocol, it is far from mature and complete. The middleware layer may also be a long way from maturity, and the middleware layer may be an important piece of infrastructure needed to integrate blockchain into the real world and the real economy in the future.
When these things have gradually become standardized and mature, we will usher in a stage where blockchain goes mainstream and explodes.
As for the development of the entire blockchain technology, Helium China Managing Director pointed out: "Currently, the user experience of various blockchain applications is not very good. The development of middleware and the maturity of the user end are the key points to achieve large-scale applications. "It requires maturity and clarity at the regulatory level for blockchain to land and become part of the real economy."
However, the application of blockchain still needs to be explored. Without improved performance of the underlying infrastructure of the blockchain, future commercial large-scale applications will be difficult to achieve. So what's the reason why so many blockchain apps don't get off the ground? "One is that it's not developer-friendly; Second, the expansion performance is limited; The third is the lack of interoperability, whose core logic is that the future blockchain world is not just one chain, but multi-chain coexistence. Cross-chain interoperability is important because different chains exist for different commercial applications."
Why is interoperability critical for different blockchains?
The "interoperability" of a blockchain means that different blockchain networks can easily communicate with each other and share information. Interoperation mainly refers to application layer interoperation, interchain interoperation and data interoperation under the chain.
In an interview with Forbes, the CEO of IOHK and founder of Cardano said that blockchain interoperability will allow easy migration from one system to another.
In the blockchain industry, a blockchain that can meet the needs of users and operate efficiently is a necessity, and its status is as light as a weight. While Ethereum innovated by creating smart contract technology and building a super ecosystem of applications, it fell far short of meeting business needs, at least until Ethereum 2.0 was fully launched.
Why is blockchain interoperability so important? With the continuous expansion of blockchain technology itself and its application in different industries, it is difficult to interoperate between different chains, difficult to connect between different applications, and difficult to trust interaction on and off the chain. These problems, to a large extent, limit the large-scale application of blockchain.
Scenario requirements may differ between different blockchains, and a large amount of interaction is required under these different requirements. Iris, Head of Business Strategy for Asia, Edge & Node, on interoperability, said: "If you have islands between chains, there is no way to interact, which can greatly affect the application. There are different levels of interoperability across the chain, from assets to data to even lower levels of consensus. A lot of projects already have assets across the chain. The next difficult step is data across the chain."
It is not enough just to achieve interoperability between different blockchains. In the eyes of the founder of Thunder Rabbit Technology, interoperability should not be limited to the interior of the blockchain ecology. Only through the interoperability between the blockchain and the Internet can the user base be maximized.
Cross-chain technology is the key to interoperability. At present, cross-chain technologies include notary mechanism, side chain/relay chain, hashing time locking and distributed private key control, etc.
According to O3Labs product VP Tim, there may be some challenges in the interoperability of different chains in terms of data trust and security in the process of interaction. He added:
"First, the user experience. Products should be made for more users, no matter in enterprises, institutions or consumers, will take user experience into account. Even if it's technically possible, it has to be possible on the experience side. Second, security. Different chains may need to adjust some of the data below the chain. Different chains have different methods, so it is important to ensure the accuracy of the data. Because it's going to become a foundation, if there's going to be a lot of applications on the chain in the future, the accuracy of the data and the speed of the data and so on has to be very consistent."
Just like the traditional Internet pays attention to privacy protection, it is also important to pay attention to privacy protection in the process of interaction between different chains and chain to chain. Privacy should be avoided in every interaction. Lin Huang, CTO of Suterusu, said that at present, there are too many cross-chain projects, and we can see a lot of products in this field. However, few products have considered supporting multi-chain privacy protection. Suterusu has done a lot of work on privacy protection now and will be deployed on some chains.
The future of blockchain -- multi-chain coexistence
The blockchain industry has been in constant evolution. In addition to Ethereum, there are many other blockchains with the same vision as Ethereum, such as EOS, Polkadot, Cosmos, Avalanche, Polygon, etc.
The development of competition and cooperation in various industries is inevitable, so is the blockchain industry. Only competition can lead to continuous innovation.
In the future, Ethereum will not be "one super and many strong", but will inevitably form a situation of multi-chain coexistence. Different public chains and different infrastructures will have some differentiated competition, and finally these different chains will be connected together through cross-chain technology.
In three to five years, especially as the operating system layer matures, blockchain technology should become a regular technology. If developers don't know how to use traditional databases, they don't need to work at all. In three to five years, every developer should be building basic applications using blockchain technology.