What Is Blockchain Interoperability And How Dow Does It Work?

Although distributed ledgers are new to the world of blockchain, they’re still getting a lot of popularity these days. As more people continue to explore new chains, interconnecting the new and old blockchains is becoming a necessity.

In this guide, we’ll see how blockchain interoperability is becoming more important and what its importance is in the long term.

Due to the increasing popularity of cryptocurrency and blockchain technology, more developers are getting interested in the technology, and that’s why new blockchains are emerging so frequently. Another reason for the introduction of new blockchains is that there’s no single perfect solution to users’ needs.

For example, blockchains like IOTA are developed to sort out payment-related issues on IOT. There are lots of other examples like this which can serve the blockchain community a lot better when they work independently and are interoperable with other blockchains as well.

One thing you should keep in mind is that every blockchain has its own capabilities and handles transactions and data in its own way. Moreover, specific blockchains are being developed for different religions and labour unions around the globe.

One of the biggest advantages of emerging blockchain technology is that it will give rise to lots of different types of blockchains being developed for specific purposes in the upcoming days. Cross-chain technology is only one example of technological advancement in this regard.

Cross Chain Technology

Cross chain technology is being advertised as the only viable solution to ensure interoperability between different blockchains. With the help of this technology, we should be able to transfer value and other types of information and data between different blockchains without compromising security.

Some of the biggest blockchains which are currently in use, for example, Bitcoin, Ethereum and Ripple, have their own limitations when it comes to scaling as well. Currently, most of the blockchain ecosystems work in isolation and try to resolve every problem they have on their own.

When blockchains work in isolation, it keeps their users from enjoying all the potential benefits of blockchain ledger technology. Since blockchains cannot communicate effectively with one another, this keeps their users from enjoying the full benefits of the technology.

Cross-chain technology resolves this issue by ensuring interoperability between different blockchains. This enhances the ability of every blockchain to communicate with other blockchains and to share relevant data with them as well.

Compatibility of Cross Blockchains

Protocols which are developed to combine different blockchains allow us to exchange data and values between different blockchains. Due to the benefits of decentralization, cross-chain compatibility should allow mass adoption of blockchain technology around the globe.

The technology allows different blockchains to communicate with one another without requiring any third party as an intermediary. So, with the help of this technology, blockchains which are established on the same network should be able to transfer value between themselves easily.

In the case of businesses which use any blockchain technology, they will be able to communicate with their clients on other blockchains as well and won’t have to rely on the main network the business was established on. Blockchain interoperability will allow businesses to receive transactions from clients and businesses on other compatible blockchains as well.

This process won’t even require the business to spend extra money on transaction costs, and the whole process will take place in a short amount of time. So, cross-blockchain networks will be able to allow a seamless exchange of value between different blockchains.

One of the biggest blockchains which are actively trying to benefit from cross-chain technology is Ripple. They are trying their best to allow people from every blockchain to easily transfer value without having to suffer from heavy transaction fees.

As the first step, Ripple has started to help banks around the globe in settling cross-border payments in different currencies. However, the project is still far from complete and will require lots of hard work from their development team.

Importance of Blockchain Interoperability

No matter how beneficial the blockchain interoperability technology might be, its ultimate test will be in helping different blockchain projects communicate with one another seamlessly. That is why the project focuses on allowing every compatible blockchain to share its value and data with other blockchains without any restrictions.

Interoperability means the capability of a blockchain to access information from another blockchain without any restrictions. For example, whenever a person sends data from one blockchain to the other, the other person should be able to easily access and read it.

Currently, it is impossible to send data between different blockchains, like Bitcoin and Ethereum, as they are not interoperable.

Cross-chain technology has the main goal of helping different blockchains like Bitcoin and Ethereum communicate with one another and ensuring a smooth transfer of value and information. Most of the new blockchain projects are adopting this technology as they try to become compatible with the bigger blockchains without requiring approval from any third party.

Blockchain interoperability will ensure to save the true essence of decentralization by eliminating any third parties, like in the case of centralized systems. By allowing different blockchains to communicate with one another without any third party, we can progress towards truly decentralized blockchain systems.

The Need for Blockchain Interoperability

One of the key reasons why blockchain interoperability is needed is because it will allow people to make transactions between different blockchains easily. Currently, there is almost no interoperability between different blockchains.

For example, if you are using Bitcoin, you can only make transactions on the same blockchain. The same goes for Ethereum and for any other blockchain, for that matter. So, it is almost impossible to transfer data between different blockchains.

We can immensely improve the functionality of blockchain systems by ensuring interoperability between them. One of the biggest benefits is that users will be able to make payments across multiple blockchains with ease. With the help of this type of interoperability, we can ensure a bright future for the decentralized blockchain economy.

With a little effort, we should be able to make multi-token transactions thanks to blockchain interoperability. We will have to develop multi-token wallets for this purpose. When this happens, cryptocurrency investors would be able to easily store all of their cryptocurrencies in a single wallet and make any type of transaction with ease.

Blockchain Interoperability: Different Projects

Since everyone needs interoperability between different blockchains, many developers are already working on creating perfect interoperable blockchains. In order to enhance the mass adoption of blockchain technology, developers will have to increase the number of projects focused on blockchain interoperability.

For example, let’s take a look at some of the biggest blockchain interoperability-focused projects currently in existence.


Blocknet is one of the most prominent projects focused on blockchain interoperability and decentralization. The project is focused on ensuring interoperability between different blockchains, and it has the potential to change the way we currently look at blockchain technology.

Blocknet is focusing on decentralizing every aspect of its blockchain in an effort to develop the first-ever decentralized cryptocurrency exchange. The platform is currently under development, and a cross-blockchain infrastructure is being developed.


Polkadot is one of the biggest blockchains focusing on multi-chain interoperability. The technology focuses on taking the interoperability of different blockchains to a whole new level. With the help of its unique features, the Polkadot blockchain can seamlessly transfer smart contract data between different blockchains.

The network structure relies on multiple parachains that are interconnected despite being very different from one another. Depending on the number of chains in a network, the transactions can be easily divided into multiple parts. The whole process ensures zero compromises on the security of the blockchain.

With the help of Polkadot blockchain technology, we should be able to connect oracles, private chains, and public networks together. The interface is also designed to be fully decentralized. The developers aim to create a fully decentralized and interoperable blockchain system which can work without any intermediary.

The information should be exchanged seamlessly with the help of the Polkadot blockchain as the relay.

The main powers of blockchain interoperability technology are governance and easy scalability.

Aion Online

Aion online is one of the biggest emerging projects in the blockchain interoperability realm. It also focused on easy scalability. This is a protocol that is advertising itself as the perfect protocol which can be used by new blockchains. This project also focuses on interoperability and true decentralization of blockchain systems.

A multi-blockchain hub is already created, and new blockchains are regularly listed in it.


It is one of the best yet underrated blockchains interoperability-related projects out there. It focuses on combining various blockchain projects together. The developers of Cosmos blockchain have developed a development kit which can be used by new blockchain projects which want to resolve their scalability as well as interoperability-related issues.

The Cosmos blockchain is, in fact, a bunch of blockchains connected together. It has a central blockchain or Hub, which is connected to several smaller blockchains or Zones. Tendermint Core is used as a consensus mechanism to power the whole Cosmos blockchain. It powers the Hub, as well as every Zone in the blockchain network.

The project has a specific communication protocol which allows different blockchains to interoperate through the central hub.

Users can make secure and fast transactions from one Zone to the other through the central Hub that connects everything, all without engaging any third party. Its IBC connection allows the interconnection of different zones, both from private and public projects.


This project marks itself as the first-ever interoperable blockchain which enables multi-party transactions. It has the ultimate goal of supporting and hosting every digital asset in existence on its blockchain.

The strategy used by Wanchain to achieve its goals is currently one of the unique approaches to achieving blockchain interoperability.

The project uses updated cryptographic theories to make multi-chain interoperability possible. It uses a custom protocol to connect different public and private blockchains with one another. Through this technology, sending and receiving assets between different blockchains should be seamless.

Since Wanchain is based on Ethereum, it enables the creation and execution of smart contracts. These unique aspects make Wancahin a perfect solution for multiple applications of blockchain technology, which require different blockchains to interconnect with one another. Security and privacy are made sure by features like Stealth Addresses and Ring Signatures.

Use of Blockchain Interoperability in the Healthcare Sector

Barriers to sharing and acting on data are one of the biggest issues in the healthcare industry right now. The issue has crippled the healthcare industry for many years, making efficient service delivery very difficult. Many organizations and government bodies have tried to resolve this issue, but no one has been able to generate considerable results.

Currently, a centralized system is used to transfer healthcare-related data between different institutions. Since the data delivery system is weak and insecure, there are lots of risks associated with data transmission in the healthcare sector.

According to a survey, around 85% of healthcare providers aren’t able to easily share data with other providers due to interoperability-related issues. Although some providers have developed their own interoperability-related solutions, they’re still only being used in closed and limited ecosystems.

Creating a single solution to interoperability for the whole healthcare sector is often considered extremely difficult.

Blockchain interoperability is one of the most viable solutions for the healthcare sector as well. That’s why we should only focus on the development of this technology to ensure a smooth transfer of data between every industry.

The same technology can be applied in the healthcare sector to help sort out interoperability-related issues.

Owning the Data

Controlling and owning the data is one of the biggest issues in the healthcare sector. However, due to the unique abilities of an interoperable blockchain network, healthcare providers would be able to maintain ownership and full control of their data.

Because of the digital ledger used by blockchains, healthcare providers can safely share data without the fear of it being stolen during the delivery process or being modified after the delivery. Blockchains can easily create read/ write access logs and make the whole process immutable to ensure peak security.

Efficient and Transparent Process

Interoperability in the healthcare sector with the help of blockchain technology also has the potential to make the whole process efficient and transparent and can reduce the overhead as well.

Since smart contracts are used in the whole process, there is no need to involve any third party. This should make the whole process automatic and immutable.

Better Security

According to independent surveys, only 40% of healthcare data is currently encrypted. However, as soon as blockchain technology gets implemented in the healthcare sector, all of the data will automatically get encrypted.

Default encryption standards implemented in blockchain technology will help in eliminating data breaches in the healthcare sector.

Governance between different blockchains in healthcare sectors is currently one of the biggest issues. If the industry fails to agree on a specific government structure, solutions like blockchain interoperability will only have limited implementation in the healthcare sector.

According to the standards of blockchain interoperability, major players in the industry need to develop a consensus on a governance structure. There are already lots of efforts being made in this regard, but the whole process could take some time to complete.

Moreover, the healthcare sector will have to assess the quality and functionalities of different blockchain networks to choose the best one of the lot.

There are some solutions already being made and advertised for the healthcare sector. Some famous examples in this regard are PakitDok, Gem, and Change Healthcare.

Major Challenges Associated with Blockchain Interoperability

One of the biggest challenges facing blockchain interoperability is the fact that there are lots of different blockchain networks which do not work on the same principles. For example, different blockchain projects use smart contracts differently and to a specific extent. Other differences include transaction schemes and consensus mechanisms.

In order to ensure seamless interoperability between different blockchains, a universal solution needs to be developed. The solution should allow easy communication between different blockchains. The use of open protocols is regarded as one of the best solutions to this problem.


Ensuring cross-chain compatibility and interoperability between different blockchains is one of the most important aspects of blockchain technology. With the help of these functions, blockchain technology can be easily made widely adaptable around the globe, and any issues regarding the interoperability of blockchains can be easily sorted out.

Interoperability between different blockchains can easily sort out the issue of scalability, which has been crippling the blockchain industry for many years. So, ensuring interoperability can act as a booster for blockchain technology.

You can check other online sources to learn more about blockchain interoperability and the importance of this technology for the bright future of a digital economy.