What is the application value of blockchain cross-chain technology? Why is cross-chain technology needed? What is the function?

In fact, when everyone understands cross-chain technology, they can understand blockchain as a decentralized ecosystem driven by distributed ledger technology. However, this is not a cumulative ecosystem because there are many blockchains in the market. And each blockchain’s ecosystem is isolated from each other. Individual chains are now designed with specific use cases in mind, so they have specific advantages, limitations, and varying degrees of decentralization. Since blockchains mainly exist in silos, they cannot communicate with each other, so cross-chain technology is very It's important. Many investors want to deeply understand the application value of cross-chain technology? Let me tell you about it below.

What is the application value of cross-chain technology?

As enterprises, large enterprises and startups are increasingly adopting blockchain solutions in their operations; they realize that no blockchain protocol can exist or reach its peak with complete exclusivity Best efficiency. Just imagine how efficient your email service would be if you couldn't send mail from Gmail to Yahoo or Outlook. Interoperability between multiple email ecosystems makes email services as efficient as they are today. The same phenomenon of interoperability also increases the efficiency of operating systems.

The blockchain ecosystem also requires interoperability – the ability to seamlessly transmit information and exchange data between any blockchains. Cross-chain technology is to enhance blockchain communication through the development and deployment of interoperable blockchain systems.

As the blockchain industry evolves, we are witnessing the launch of new blockchain protocols, each with a unique approach, new consensus protocols, and a whole new set of capabilities to host different applications . However, they are all growing in parallel and not scaling to the next level because the basic architecture of blockchain forces them to operate within silos. This is creating separate ecosystems that cannot interoperate. Cross-chain technology is important because of its potential to promote blockchain interoperability.

Why is cross-chain technology needed?

Blockchain interoperability is needed to overcome the limited capacity of blockchain protocols and enable greater scalability, faster block times, and greater security. Explainability will also help reduce operational costs associated with blockchain solutions. Listed below are some of the blockchain limitations that result from poor or no blockchain interoperability.

The lack of direct interoperability between Bitcoin and Ethereum limits Bitcoin users from using their cryptocurrency within Ethereum’s DeFi ecosystem. Due to non-interoperability, users cannot even directly exchange BTC for ETH without involving a centralized cryptocurrency exchange. Both Ethereum and Binance Smart Chain individually support USDT, but USDT cannot be sent directly from the Ethereum blockchain to Binance Smart Chain or any other blockchain.

Blockchain pioneers envision applying blockchain to traditional financial systems. But interoperability limitations can hinder the implementation of effective solutions. That’s because if two banks use different blockchains, it would be too complex, if not outright impossible, to conduct transactions between bank accounts at those two banks. Without interoperability, blockchain in financial systems will create a rather isolated system rather than an integrated one.

What is the role of cross-chain technology in blockchain?

Cross-chain technology in blockchain refers to the technology that enables interoperability and asset transfer between different blockchain networks. Its role is mainly reflected in the following aspects:

• Improve the interoperability of blockchain networks: Cross-chain technology can help different blockchain networks achieve interoperability. Enable them to communicate and exchange data with each other, thereby enhancing the collaborative capabilities of the entire blockchain ecosystem.

• Realize cross-chain transfer of assets: Cross-chain technology allows users to freely transfer assets between different blockchain networks, realize cross-chain asset exchange and flow, and improve the flow of assets. sex and flexibility.

• Improve the security of blockchain networks: Cross-chain technology can help different blockchain networks share security and protection mechanisms, reduce the risk of network attacks, and improve the overall blockchain The security of the chain ecosystem.

• Break the island effect between blockchain networks: Cross-chain technology can break the barriers between different blockchain networks, promote cooperation and information sharing between them, and promote the entire The development and progress of the blockchain industry.

I hope investors can understand the application value of cross-chain technology through the above article. A clear path to an interoperable, scalable, usable crypto world is cross-chain compatibility. If Bitcoin, Ethereum, etc. cannot easily share data or exchange value with other blockchains, then the blockchain is not Maybe as ubiquitous as artificial intelligence or the Internet of Things. Cross-chain architecture promotes interoperability, allowing two or more blockchains to weigh their efficiency, decentralization, feature set, and security, and cross-chain technology can also better improve chain efficiency and reduce fragmentation, Allowing users and functionality to flow more freely across multiple blockchains.

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