Overcoming the lack of interoperability between blockchains

Written by Alex

May 26, 2020

The blockchain technology is being adopted or, at the very least, considered for adoption by a growing number of industries, as confirmed by Deloitte’s 2018 report

However, at this stage, the lack of interoperability between blockchains and the absence of friendly UI results in low user adoption, which is detrimental to the growth of the blockchain industry.

Currently, crypto speculators are the main active users of blockchain technology despite the growing numbers of blockchain offering practical solutions in a myriad of domains, encompassing almost all aspects of life, from banking and financial, legal, voting, health, insurance, supply lines, e-retailing, ecology, digital rights, real estate and many more.

Unfortunately, at this stage, blockchains operate mainly in individual bell jars, each one in its corner. Though the logic of focusing on developing the best blockchain for the field and thus conquer the market makes sense in the current business world based on the rule of major corporations, it is ill-suited for the blockchain decentralized underlying philosophy and deters from mass adoption. Users unfamiliar with the technology and unwilling to invest time and effort in overcoming the technical barriers currently plaguing the blockchain universe still constitute the vast majority of the world population and, without efforts in developing blockchain interoperability, they are unlikely to hop on the blockchain train.

To better understand the hurdles that currently hamper mass adoption, let’s imagine a regular user unfamiliar with blockchain technology but who, having heard about its advantages, wants to use it for its own benefit.

For the sake of this example, we’ll imagine a fictitious New York apartment owner, called Richie Rich, who wishes to retire in Florida. He would like to sell his uptown penthouse with a view on Central Park and use the proceeds to buy himself a condo in Florida as well as a cottage for his son in Estonia and a studio for his daughter in Japan. Should there be any remaining funds, he would like to invest those in real estate.

Having heard that blockchain technology, when applied to real estate, considerably reduces the prohibitive costs associated with real estate purchases — lawyers fees, funds transfer, title registrations etc, and the associated complicated administrative requirements, Richie entrusts the sale of his NY flat to a real estate blockchain. He carefully follows the instructions and, at the conclusion of the sale, is the happy owner of $10M worth of the New York real estate blockchain tokens, known by the ticker NYRE (New York Real Estate).

Richie has successfully opened a wallet on the NY real estate blockchain, with the relevant private and public key and is keeping those keys safely stored as instructed.

He now turns to an Estonian and a Japanese real estate blockchain to purchase properties for his children. In a short while, he finds the properties he wants to buy and is delighted to see that all the deeds and titles are readily available and that both blockchains can transfer ownership of the properties without costly lawyers’ intervention or time-consuming gathering of documentation, stamps, registration and so forth.

Richie congratulates himself on his efficiency and prepares for the last step, paying for the properties he wants to buy for his children.

Unfortunately, he cannot use NYRE without going through an exchange that can convert his NYRE into ERE (Estonian Real Estate — the token used by our imaginary Estonian real estate blockchain) or into JRE (Japanese Real Estate — the token used by our imaginary Japanese real estate blockchain).

To add to the difficulty, the three real-estate blockchains are built on different blockchain technologies and he needs to first convert his NYRE in either Bitcoin or any other major cryptocurrency in order to be able to purchase the JRE or ERE necessary to complete buying the properties in Japan and Estonia, or, alternatively, to convert the NYRE into FIAT currency and use those to buy the cryptocurrency enabling him to buy JRE and ERE.

In trying to do so, Richie has to research which exchange can do what with which currency, open additional wallets, (each time jumping through the KYC requirements anew to validate his identity), save their respective private and public keys in safe place, but in such a way that an ill-intentioned onlooker cannot guess which key is related to which wallet, then use the right key with the right wallet and, in no time at all, Richie has lost the last of his remaining hair, his blood pressure is climbing to the roof from the induced stress and he is cursing the day he ever decided to go the blockchain way.

Desperately lost in the non-interoperable space between blockchains, Richie finally hires the very expensive services of a blockchain expert to successfully navigate the inter-chain transactions and hopes that he is not making a mistake by trusting him with the private keys of all of his wallets.

It goes without saying that Richie is unlikely to ever recommend using blockchain real estate to his friends, nor is he likely to use blockchain to invest his remaining $3M through blockchain real estate Dapps

If only there was a unified blockchain Operating System enabling him to manage all his crypto assets and transaction from a single place, Richie’s situation would be considerably improved.

That unified blockchain Operating System is exactly what Safebit is currently developing. With a universal wallet and a centralized crypto-asset management interface, Safebit intends to offer users a convenient and user-friendly platform to do just that, and much more… 🙂

Source: https://hackernoon.com/overcoming-the-lack-of-interoperability-between-blockchains-d3fb5ccc308a?utm_sq=g3yif05qwc&utm_source=LinkedIn&utm_medium=social&utm_campaign=XDLT&utm_content=XDLT

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