Sidechains and interoperability

TL;DR

This paper reviews various strategies and approaches for blockchain interoperability, highlighting the challenges and the limited high-level solutions despite numerous implementations.

Contribution

It provides a comprehensive comparison of existing interoperability methods and discusses the complexities involved in cross-chain communication.

Findings

Few high-level interoperability approaches exist.

Implementation methods vary significantly.

Interoperability remains a major challenge for blockchain adoption.

Abstract

There appears to be an insatiable desire for spawning new bespoke blockchains to harness the functionality provided by blockchain technologies, resulting in a constant stream of blockchain start-up companies entering the market with their own unique vision and mission. Some target a particular niche market such as supply chain and financial services, while others strive to differentiate themselves from the increasingly saturated market by offering new functionality. This dynamic and constantly changing blockchain ecosystem makes it very challenging to keep abreast of all the latest breakthroughs and research. It is evident that there is also a growing desire to collaborate with others developing blockchain solutions, which brings new impetus to blockchain interoperability research. We review the strategies that some key players in the blockchain ecosystem have implemented, or are proposing to develop, to satisfy this increasing demand for cross-chain communication and transactions between sidechains. Interoperability presents a complex and challenging stumbling block to the wider uptake of blockchain technology. We find that although there is a plethora of blockchains and interoperability implementations, or proposals, at a higher level of abstraction there is only a handful of approaches. However, the way they are implemented can differ quite substantially. We present a summary of the reviews we conducted in a table for ease of comparing and contrasting.