Cross-chain is a technology that enhances the interconnection between blockchain networks by allowing the exchange of information and value.
What Is Cross-Chain?
Cross-chain is a technology that enhances the interconnection between blockchain networks by allowing the exchange of information and value. In doing so, it breaks the siloed nature of blockchains to create an intertwined distributed ecosystem. Notably, a cross-chain operates independently from the connected platforms, hence, it doesn’t inherit the shortcomings of its interfaced networks. Inter-blockchain technology aims at eradicating intermediaries when moving value between decentralized networks, enabling users to interact with other blockchains seamlessly.Leading cross-chain projects include Polkadot, Blocknet, Cosmos and Wanchain, each of which focuses on a different aspect of interoperability. For example, Polkadot aims at enhancing the sharing of smart contract data between distributed platforms while Blocknet puts more effort into a decentralized exchange (DEX) operating between blockchains.
Furthermore, Wanchain sees a future where all digital assets live on a single network while Cosmos provides a base that supports other blockchains using zones connecting to a central protocol called the Hub.
Some industries that require cross-chain technology include decentralized finance (DeFi) and healthcare. In the DeFi scene, inter-blockchain connectivity enables token swaps between different networks, fostering interoperability, which is crucial for financial ecosystems to thrive.
Cross-chain technology also allows users to overcome common trade-offs among distributed platforms and tap into the benefits of various consensus mechanisms so they could get the best of all worlds.
Furthermore, in the healthcare sector, cross-chain systems promote data ownership, security through encryption, efficiency, and transparency.