Lessons Learned: The Internet's Evolution as a Blueprint for Blockchain Interoperability

Sergey Gorbunov

Sergey Gorbunov

By Sergey Gorbunov, Co-founder and CEO of Axelar

With the evolution of blockchain technology, there are many lessons we can glean from how the first global communication networks evolved, particularly when it comes to connecting distinct systems and protocols. While the Internet enables users to seamlessly share and exchange information across geographic regions and timezones, it has failed to deliver many fundamental properties such as authentication, traceability, and inclusivity required to establish trust and secure information exchange between users. These are just some of the properties that Web 3.0 and blockchain technology aims to deliver. As we’re building these new decentralized networks, it’s crucial that we learn everything we can from the Internet’s evolution.

Although the term “blockchain” is now widely used across industries, the concept remains enigmatic to many. Simply put, a blockchain is a decentralized ledger of information that is stored and maintained across a distributed network of computers, rather than with one centralized authority. A key distinction compared to classical distributed protocols, is that the blockchain protocol remains secure even when some of the computers on the network act maliciously. The result – the records of information recorded on the blockchain are virtually tamperproof and hence anyone can verify information recorded in it. Though hard to believe, three decades ago the term “the Internet” stirred similar feelings of confusion among the general public – who had not yet realised the potential of the technology.

Today, most have gained a thorough appreciation of the Internet’s capabilities and we take this technology for granted. For many, the Internet is now as indispensable as electricity. However, the execution of the simplest tasks we perform on the Internet relies on multiple layers of infrastructure, protocols, and APIs that were built over decades.

From concept to critical infrastructure

In contrast, we are only at the advent of understanding blockchain’s full potential. The impact of blockchain is not as immediately obvious in our day-to-day lives as that of the Internet. But just like the Internet made it possible to frictionlessly share information, blockchains promise to enable users to exchange value, assets and verifiable information with absolute trust.

When people compare the potential of blockchain and the Internet, what they’re really referring to is the Internet Protocol suite, also known as transmission control protocol/Internet protocol (TCP/IP) stack of protocols.

This stack includes protocols responsible for delivery and transmission of information across networks, as well as application level protocols (such as HTTP(s), SSH) that make it easy to build globally interconnected applications. Network and infrastructure engineers configure routers and gateways on the Internet to support seamless delivery of information across networks. At the same time, developers build and host their apps on any network and utilize simple application-level protocols and APIs to enable anyone in the world to use them.

Blockchain represents one of the key pillars of the next generation of the Internet, alongside technologies such as artificial intelligence and edge computing. While we aren’t quite there in regards to the full capabilities of Web 3.0 just yet – blockchain is already becoming an important infrastructure for many businesses and institutions. Unfortunately, many protocols and infrastructure components are still missing to take blockchain to mass adoption.

Achieving mainstream adoption

One of the greatest obstacles to the realisation of Web 3.0 and the mainstream adoption of blockchain is the issue of interoperability – or the lack of robust cross-chain protocols and infrastructure.

Within the blockchain industry there are a number of highly valuable and functioning ecosystems, built on different networks and with no way of communicating with one another. For instance, Bitcoin and Ethereum are two of the most popular networks in the space, but there is currently no way to build applications utilizing assets and users of both chains.

Furthermore, one of the unique properties of blockchain is that it enables everyone to share a common ledger and compose applications. A decentralized exchange built on Ethereum may query exchange rates, lending/borrowing rates, or any other information it deems relevant to offer a competitive exchange rate. Unfortunately, as we enter the multi-chain universe we break this composability and shared liquidity. Applications built on each network cannot connect, putting blockchain a step behind the World Wide Web, despite all of its decentralized benefits. 

For comparison, imagine you could send an email to someone within your organization, but to send it to a friend in a different company, you would need to (a) send it to a “proxy” address, (b) use the proxy front-end to specify the destination network where your friend is at, (c) communicate it to your friend, who (d) subsequently will need to interact with the proxy to receive your email. The Internet wouldn't be the global technology that it is today. However, to send an email, one just has to know the receiver’s email address, while on the back-end protocols and infrastructure is responsible for execution of all the steps described above and interoperability of requests across distinct networks.

With the acceleration of interoperability between blockchain networks, distributed ledger technology will soon enable existing linear systems and data to unite with commonly relevant sharing of information. The goal of which will be to create an interconnected digital core. A singular, universal suite of protocols between blockchain networks would help break down barriers and help blockchain ecosystems to achieve interoperability, empowering the industry to reach mainstream adoption.

When applications, assets, and users are connected through an interoperable ecosystem, the blockchain industry can focus on applications and end-users. Application developers can build on the best blockchain for their needs while leveraging global liquidity and composability. End-users will be able to interact with any asset or application, regardless of where it was built. 

To fully realize this vision, however, we need an array of new components in the ecosystem: we need new robust interoperability protocols, networks, APIs, cross-chain monitoring infrastructure and tools, and more. Put together, with true interoperability, blockchain users will be able to connect across ecosystems, as they currently do with the World Wide Web – all while reaping the benefits of decentralization, such as reduced points of weakness and improved data reconciliation. As we take important lessons from the evolution of the Internet and apply them to blockchain’s journey, it is imperative to make blockchain interoperability a top priority for the realization of Web 3.0.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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