The panel on ‘Solving blockchain’s interoperability challenges’ during the London Blockchain Conference 2024 discussed the matters of interoperability in blockchain technology. Becky Ligero (Host for CoinGeek) moderated the discussion, which featured:
- Clem Chambers (CEO of Online Blockchain)
- Irina Benfrid (B2B Partnerships Lead at Rubic Finance)
- Ty Everett (CEO of Project Babbage)
- Evelyn Nomayo (PhD Researcher at Trinity College)
The panellists gave the audience insights from the entrepreneurial and academic as well as the developer’s managerial perspectives. Their different backgrounds produced interesting and partly controversial points of discussion. In the end, an interesting conversation between single-chain and multi-chain proponents emerged.
Exploring the status quo of blockchain interoperability
To set off the discussion, Ligero invited the panellists to discuss why interoperability is a major challenge for mass adoption. Chambers attributed the issue to fragmentation, as numerous people create different standards and tokens believing to have found better solutions than competitors.
Benfrid similarly highlighted the influx of new entities and people coming into the industry with different perspectives, backgrounds and agendas. As blockchains are often specialised to cater to specific use cases, this creates the need to connect different blockchains.
As Everett is an experienced developer, he had a more practical approach to Ligero’s question, he emphasised the need for standardised developer tools to avoid building apps multiple times for different blockchains. He advocated for a single-chain solution, specifically the BSV blockchain, due to its low fees and high transaction volume. However, he acknowledged the current landscape of blockchain technology, in which different blockchains coexist and cooperate.
Use cases for interoperability
Interoperability in blockchain technology enables different blockchain networks to communicate and interact with each other, facilitating the seamless exchange of information and assets. The panellists presented use cases for interoperability in blockchain technology, some of the cases are offered by their companies as a service.
- Cross-Chain Asset Transfers Moving digital assets from one blockchain to another. This enables users to leverage the specific advantages of different blockchains (e.g., lower transaction fees) while maintaining access to their assets from the original chain.
- Payments and everyday transactions Can be implemented for example for everyday purchases, like buying a product from a vending machine using digital assets. Interoperability ensures that regardless of the type of asset held by the user, transactions can be processed efficiently and affordably, making payments more practical and widespread in real-world applications.
- Interbank Settlements Different banks using different protocols need to communicate and settle transactions seamlessly. Interoperable blockchain solutions can streamline these processes, reducing delays and improving the efficiency of financial operations.
- Smart Cities and Public Safety In the context of smart cities, interoperability is crucial for integrating various systems that manage public safety, traffic, and other urban services. For instance, if traffic management systems can communicate with emergency response systems, it can facilitate faster incident responses and better coordination during emergencies.
Security concerns regarding interoperability in blockchains
Another important discussion point is the issue of security of interoperable blockchains. Benfrid highlighted security concerns as a major barrier to new users, noting the risk of losing money and the presence of malicious projects. She mentioned how her project survived two hacks, underscoring the importance of rigorous security measures and regular audits.
Chambers described the security landscape of blockchain technology as a ‘nightmare’, emphasising the impracticality of self-custody for large sums and the complex, risky nature of current systems. Everett countered by suggesting split key architecture and threshold signatures for added security. However, Chambers maintained his position that such security measures are too impractical for the average user.
Takes on scalability
On the issue of scalability, Chambers argued that issues will be resolved naturally as demand increases, similar to how technological advancements have historically met capacity challenges (e.g., hard drive storage). Rather than focusing on scalability as an immediate problem, he expressed frustration with the lack of innovative blockchain applications.
Everett agreed with Chambers on the lack of innovative apps in the blockchain space, but advocated for the BSV blockchain as a go-to solution for most applications due to various advantages, he cited:
- Cheap and scalable transactions
- A public blockchain for data availability and coordination
- UTXO-based architecture for high transaction volumes and low fees
Further, he highlighted the importance of unified systems and standards for creating transactions to streamline app development and foster innovation. This coordination is essential for advancing blockchain technology and developing useful applications.
Nomayo focused specifically on the topic of latency issues in blockchain interoperability, which is her field of expertise. Nomayo explained that different consensus protocols contribute to latency problems and suggested using federated learning to predict and reduce latency. Federated learning involves decentralized data training on individual systems, which preserves privacy and can predict demand for information, thus reducing latency.
Multi-chain vs. single-chain perspective
During the panel discussion, the differences between single-chain and multi-chain proponents became apparent, at least to some extent. In the Q&A session that followed, an audience member brought the question back into focus. He asked specifically what Everett’s position was on the possibility of chain abstraction, which means the standardisation of prominent chains that should have common entry points to benefit collectively from liquidity and compatibility.
Everett answered by referring to X.25, which was an alternative internet protocol developed in the 1970s. It was used until the early 2000s but failed to attract mass adoption. Until that point, a lot of the businesses that built their businesses and solutions on X.25 had to spend a lot of money on consultancy firms and bridge technologies to connect to other internet protocols.
In this context, Everett also hinted at his Bitcoin CPU presentation that he made one day before the London Blockchain Conference at the BSV DevCon 2024.
