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If you consider an excellent blockchains experience, cross-chain interoperability is one of the most effective solutions to make this possible. Blockchain interoperability is a new technology that facilitates the transfer of value and data between two or more blockchain networks. The rapid growth of some of the most popular blockchains, including Bitcoin Ethereum, and Solana, has led to the emergence of some important issues. These networks allow users to trade tokens on the blockchain, but scaling has often been a serious technical limitation. As a blockchain development company providing services and helping other companies and projects build cross-chain solutions, we wrote this article to give some sort of insight into cross-chain interoperability.

A brief introduction to cross-chain technology

The adoption of blockchain technology is driven primarily by the underlying functions and inherent benefits. The number of blockchain projects is steadily increasing as developers continue to innovate and adopt the technology. As the number of blockchain users grows, interoperability between different blockchains needs to be enabled. There is no one-size-fits-all solution that can fix all the shortcomings of a particular blockchain, so new protocols are constantly being developed to optimize existing blockchains. The blockchain ecosystem also needs interoperability, the ability to seamlessly transfer information and exchange data between blockchains. Cross-chain technology is the enhancement of blockchain communication through the development and deployment of interoperable blockchain systems. When it comes to the need to improve interoperability between blockchains, cross-chain technology is one of the most effective solutions to make this possible. This is a new technology that facilitates the transfer of value and data between two or more blockchain networks.

Why is cross-chain technology essential?

As the blockchain industry expands, we see the introduction of new types of blockchain protocols, each with its own approach, a new consensus protocol, and a whole new set of features for hosting different applications. However, because the very basic architecture of the blockchain forces it to work inside some sort of cocoon, separate blockchains grow in parallel which impedes growth. Lack of interoperability creates separate ecosystems that cannot interact. Cross-chain technology is crucial because it has the potential to promote blockchain interoperability. This is also important because it improves chain efficiency, reduces segmentation, and gives users more freedom to communicate across multiple blockchains. Cross-chain technology has great potential for blockchain interoperability. This solves many problems and removes some limitations of blockchains.

Why is blockchain interoperability needed?

Blockchain interoperability is required to overcome the limited capacity of blockchain protocols for greater scalability, faster block times, and higher security. Interpretability also helps reduce operational costs associated with blockchain solutions. The following are some of the blockchain limitations due to inadequate or non-existent blockchain interoperability. The lack of direct interoperability between Bitcoin and Ethereum limits Bitcoin users from using crypto funds within Ethereum's DeFi ecosystem. Similarly, Due to the lack of interoperability, users cannot even trade BTC directly for ETH without a centralized cryptocurrency exchange. Both Ethereum and Solana support USDT individually, but you cannot send USDT directly from the Ethereum blockchain to Solana or any other blockchain. The example scenario is one of the multitudes of problems solved by interoperability. Interoperability enables effective communication and strong connectivity between two different blockchain networks. There is no room for blockchain incompatibilities as it is typically used to initiate wealth transfers and token swaps. In addition, users can transfer information such as assets, transaction receipts, virtual contracts, and more.

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Merits of Blockchain Interoperability

Customizable Web3 services

The ability of blockchain protocols and applications to combine and share multiple functionalities is the key to creating entirely new Web3 tools and platforms that were not possible with the traditional Web2 era, industries, and business models. Interoperable smart contracts allow important business information to be sent and received between private and public networks in a customizable and controllable way. This information can play indispensable roles in industries like healthcare, law, real estate, etc. Ultimately, blockchain interoperability will also enable multi-token transactions and multi-token wallet systems, greatly streamlining the crypto user experience.

  • Connecting Two Independent Blockchain Networks
    One of the greatest advantages of cross-chain technology is that it enables effective communication and strong connectivity between two different blockchain networks. There is no room for blockchain incompatibilities as it is typically used to initiate wealth transfers and token swaps. In addition, users can transfer information such as assets, transaction receipts, virtual contracts, and more.
  • Greater scalability
    Cross-chain technology offers greater scalability than current mechanisms on the blockchain due to the limited interoperability of legacy blockchains. Blockchain software development companies help build systems that aid user interaction with different blockchain networks, making it possible to leverage the speed of multiple blockchains and ultimately improve scalability.
  • More decentralized ecosystem
    Pure decentralization within blockchain networks is a top priority for many blockchain projects, but the ability to establish network interoperability across multiple blockchains is a solution that decentralizes systems and the economy. It represents idealistic evidence of the promise of blockchain technology. Instead of processing all transactions for thousands of decentralized applications (dApps) on a single blockchain like Ethereum, one-day thousands of application-specific blocks that communicate with each other over the main virtual machine.
  • Preventing Monopolies by Large Companies
    Cross-chain technology also helps create market stability by preventing monopolies by large companies. For example, Bitcoin and Ethereum are the major names in the world of cryptocurrencies, accounting for more than 70% of the total market share. As a result of this advantage, there is no longer room for new market participants to experiment with their strategies and claim a fair portion of the overall market share. Cross-chain technology is useful in such scenarios because it creates an ecosystem in which transactional processes are equally concentrated across all networks. The focus is not only on some large blockchain networks but also on other networks. Therefore, cross-chain technology can create fair scenarios by facilitating a balanced approach for specifying how crypto players can enter the market.
  • Enhanced industry collaboration
    Blockchain technology has a wide range of industry-specific use cases, but ultimately the key benefits are data transparency and auditability smart contract execution, and decentralized consensus. When all blockchains used by different organizations and industries can interact, independent markets and business applications that were previously thought to be completely separate can more easily transfer data and value. This means that organizations and communities that normally do not interact can share information, leverage mutual strengths, and promote innovation more easily and effectively, thanks to cross-chain interoperability.

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How does Cross-chain technology work?

There is no one-size-fits-all approach to using cross-chain technology. Different networks can take different approaches to blockchain interoperability and facilitate transactions across multiple chains without the use of third-party or centralized solutions. Below are some of our approaches to cross-chain communications.

  • Atomic Swaps
    Atomic Swap serves as an exchange intermediary allowing two different parties to trade tokens on multiple blockchains. This type of mechanism does not require a centralized third party to facilitate transactions. Instead, users can trade tokens directly on a peer-to-peer basis. For example, two parties can decide to maintain an hour limit for atomic exchanges. In this case, if all conditions are not met, the original owner will receive an escrowed token after an hour has passed. Atomic swaps often come as a complex process for new users but experienced developers often find it a fun and exciting alternative.
  • Stateless SPVs
    Using the proof-of-work mechanism, a core feature of bitcoin, users can verify that transactions are unspent by combining the transaction hash and the index of the output. SPVs allow you to inspect a subset of the proof of work history with a sufficiently sophisticated smart contract. Instead of participating in the broad network with numerous transaction records, SPV nodes download the block header only, validating those headers to finalize transactions. Stateless SPVs are cheap and can be adapted to a variety of use cases.
  • Relays
    Relays allow blockchain networks to control transactions and events that occur in other chains. They operate on a chain-to-chain basis without the use of distributed nodes, making it easy for a single contract to act as a central client for other nodes in multiple chains. This allows you to see the entire transaction history and specific key headers as needed. However, the relay approach requires a great deal of effort to ensure operation and operational reliability. There are different approaches to follow for cross-chain technology to work. Merged consensus is one of the approaches that enable bidirectional blockchain interoperability between multiple networks. Meanwhile, a specific group of validated parties also come together to validate the events in the chain.
  • Merged Consensus
    This method uses relay chains to achieve bidirectional interoperability between chains. To achieve a common consensus, it needs to be built into the chain from scratch. Projects such as ETH 2.0 and Cosmos use merged consensus.
  • Federations
    A selected group of trusted parties can use a federation to see events in one chain on another blockchain. Even though the federation is strong, it requires trust in third parties. This is the biggest limitation as it breaks all the essence of blockchain decentralization.

What is the challenge faced by cross-chain systems

Following are some challenges faced by cross-chain systems

  • Trust issues in blockchain
    While interoperability is an urgent need, cross-chain systems or solutions face the challenge of "trust mismatch." Not all blockchain ledgers have the same trust system. Some are backed by 1000 miners, while others are backed by 5 miners. Transferring data from an unreliable ledger to a strong ledger can make the latter vulnerable to third-party tampering and various inconsistencies.
  • Transaction rate restriction
    Another potential technical challenge is the “transaction rate bottleneck”. This can severely impede blockchain interoperability by clogging the throughput capacity of a particular chain when receiving transactions from several chains.

Future of blockchain interoperability

Interoperability is essential for blockchain to be established in multiple industries. The need for interoperability is not limited to the exchange of crypto assets between blockchains. But in the future, we also need to facilitate the exchange of other information such as health records, supply chain records, and certificates. Cross-chain solutions are still emerging and are a promising sign of the future with better blockchain interoperability solutions. Hope is widespread as giants of various blockchain protocols and techniques are looking at ways to break blockchain through interoperability. Blockchain needs to bring interoperability to the platform so that it can be accepted across different segments that do not currently exist on the platform. In addition, the need for cross-technological interoperability requires not only secure transactions of tokens but also the secure transmission of sensitive data. Cross-chain technology is still in development, but it can play a major role in accelerating blockchain interoperability. This has great potential to emerge as a viable mechanism for driving better interoperability solutions in the future. In addition, token trading is essential for various companies and individual investors who are actively participating in the blockchain platform. Not only do these companies deal with products and services, but they also involve the exchange of sensitive data and value. Therefore, it is important to set up a system that enhances the transparency and security of transactions on the blockchain without the intervention of an intermediary. Cross-chain technology is not only a necessity today but also a hope for a brighter future.

How Rejolut can help you

Rejolut is a reputable blockchain development firm blockchain development firm that has been helping many customers with cross-chain solutions and providing blockchain development services. Blockchain has a significant impact across industries. Financial transactions today are very expensive. Retailers usually pay credit card companies a 3% payment processing fee. The best way to tackle these redundancies and create a user-friendly and affordable system is through interoperability. In a new era of blockchain technology powered by cross-chain and other solutions, moving funds and making transactions will be more efficient and easier than ever. Despise this rosy prospect, the underlying infrastructure for cross-chain must be created by seasoned developers with unparalleled mastery in the art of deploying technical solutions for diverse decentralized use cases. Our blockchain app development services include a whole range of cross-chain solutions designed for existing blockchains. We write efficient codes and create the software architectural design for the development of cross-chain solutions.

There are lots of cutting-edge advantages networks gain from leveraging our blockchain development services. To start with, Rejolut believes in decentralization and the fair exchange of value between parties that would otherwise not trust each other. Our development solutions are not just based on this but a combination of several years of technical and experience writing programs in C++, C#, JavaScript, MongoDB, Solidity, Rust, and other languages. We leverage our understanding and experience in building real solutions that help projects stand out. Aside from that, we are able to foresee and prevent backdoors that can lead to the compromise of legacy systems. We explained earlier in this article that cross-chain interoperability can come with some sacrifices. Some blockchains are obviously more secure than others because of the nature of their consensus algorithm and fundamental architecture to prevent these weaknesses from becoming far-reaching vulnerabilities, our blockchain experts apply principles of auditing and cross-chain security while deploying enterprise-grade cross-chain solutions that are efficient in many respects.


Blockchain technology has a bright future and advances in this area will play a crucial role in various sectors such as financial transactions and healthcare. Several existing companies have had to hire a blockchain developer as a matter of necessity. Blockchain Interoperability not only benefits but it helps simply activities and transactions in various aspects of Web 3.0. It also enhances growth and fosters a community around what is already known as the new Web. Despite some challenges, blockchain interoperability is now lagging behind its natural status. At the immediate scale, some changes are needed, such as allowing blockchain to interoperate between networks. Once these challenges are overcome, blockchain interoperability in the entire cryptocurrency space can grow beyond bounds to include nearly all the industries we know today. While we believe the future is decentralized, and especially, cross-chain, we hope to play a pivotal role in making cross-chain a reality.

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I have worked with developers from many countries for over 20 years on some of the most high traffic websites and apps in the world. The team at rejolut.com are some of most professional, hard working and intelligent developers I have ever worked with rejolut.com have worked tirelessly and gone beyond the call of duty in order to have our dapps ready for Hedera Hashgraph open access. They are truly exceptional and I can’t recommend them enough.
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