The Next Biggest Evolution for Blockchain Technology

What is interoperability?

Interoperability is the ability for software to exchange and make use of information. With blockchains, an interoperable system means information could easily be shared and accessed by other blockchains. Currently, every blockchain acts independently, and they require intermediaries in between them.

An example of interoperability is cross-chain atomic swaps


Currently, if you want to exchange Bitcoin for Ether you would have to register with an exchange, then transfer your coins over and trade them for Ether. This defeats the whole purpose of Bitcoin because the idea is to remove intermediaries altogether and make trading more direct, more peer-to-peer.

Atomic swaps are trades made from one user to another, or to be more precise, they are trades made from one user’s wallet to another.

Why is this important? Because this will give users…


By cutting out the exchange, users increase the security of their trading in 2 ways:
1) Atomic swaps eliminates the possibility of losing your money due to an exchange getting hacked.
2) Atomic swaps also give you control over your private keys. Nearly all exchanges do not hand over the private keys to their users, and if you do not own the private keys, you do not own your coins.

Therefore, atomic swaps give you more control and more security.

Interoperability is more than Atomics Swaps, however. To understand what more they can do for the whole ecosystem, and how they are the key to mainstream user adoption, it’s important to understand how blockchains currently operate.

Don’t worry, it won’t be technical or complex. We’ll use a metaphor.


Today, as it is, every blockchain has a specialized function. Some are for finance, others are for medical records, some are for land titles or micro-transactions. Still others are for groups of people, such as labour unions, or even governments that have their own chains.

And none of them can communicate with each other. It is as if every blockchain is its own island, with no way to access the islands around it. There is currently little or nothing bridging the distances between them.

So, imagine this scenario:
On one blockchain, there is a record of all the land titles that have been tokenized. On another blockchain, there is a list of the legalities put into smart contracts, but the two blockchains do not communicate, resulting in no real-world application for any of this technology.

Therefore, if we want to use this revolutionary technology, each blockchain will need to be able to easily communicate with one another.

In other words, the key to mainstream adoption may be interoperability.


Currently, no way for blockchains to share innovations. As things are right now, each blockchain speaks its own language.

So, a developer has to go into the source code and translate that language to fit the ecosystem that they want that innovation to exist in. This takes a lot of work.

What is not happening is an easy way to share the technological innovations that might exist in each blockchain. They are isolated and hard to get to.

In an interoperable system, there would be no need for a human translator, but rather there would be a technological one that could share that information between each blockchain, so that any new innovation can be easily accessible and used by every other blockchain.

In other words, interoperability will speed up progress.


There are at least 11 projects looking to create an interoperable system, which would bridge the gaps between each ecosystem and allow for the sharing of each ledger’s information.

In addition to those 11, there is also Lightning network and Ripple’s Interledger who are looking at ways for blockchains to read, and interact with, other blockchains.


There are some technological obstacles that developers face.

These challenges include heavy competition between each group. Remember that blockchains are value-based (think money-driven), so cooperation will be more difficult, and different agendas will compete against each other. There is a huge payout waiting for the group of people who successfully create this interoperability, and there are many groups all going head-to-head to be the first.

This is an obstacle because innovations are not necessarily shared, and competing agendas might slow down progress.

Also, successfully creating this type of interoperable distributed ledger system is hard work and will require time.

Neither of these challenges are avoidable. They are simply part of the nature of the work that is being done. The only thing we investors can do is cast our bets and be patient.

Dominic Rose

Dominic first entered the crypto space in 2015, and is now looking to make trading a successful career. His current interests involve writing on the subjects of blockchain and artificial intelligence. Outside of crypto, he is a serial entrepreneur.

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