2021/02/17

Cross-Chain Interoperability

Cross-Chain Interoperability will be a major point of discussion of the crypto economy and industry from 2021 onwards. Two contrary positions. First, the side in favor of cross-chain interoperability: 

Many blockchains will cease operations because they lack critical mass. Bear in mind, the just like any other information service, the crypto economy is a network economy in which Metcalfe's law holds true. Thus, in order to survive, smaller blockchains must build their own or build on bridges with other leading blockchains. In case of successful bridging, indirect network effects will kick in. The more chains successfully interlink with other networks, the more others will follow. 

Further, crypto governance is inherently interoperable. There is no single entity like Facebook or Google which aims at dominating a proprietary network or walled garden. Monopolists or oligopolists aim at lock-in effects through the nurturing of centrally managed indirect networks, which business eco-systems of the WEB 2.0 era eventually are. Crypto economies founded on two adjacent concepts: decentralization and interoperability allowing for a co-existence and yet competition of networks. 

The position against cross-chain interoperability: 
It is way too much work for developers to develop and operate a decentralized app ("dapp") on multiple blockchains. Second, the use cases or demand by users might be questionable. Do users really ask for cross-chain interoperability of an NFT token for instance ? Maybe at least not in the early days. They might in future to increase their value of their NFT tokens. However, for now, since it is early days, users rather prefer single blockchains which associate with great names such as NBA top shot

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