Abstract
Blockchain interoperability conflates the need for distributed systems
to communicate with third- party systems without the existence of a
canonical chain or orchestration layer. As there is not “a chain to
rule them all” (due to reasons such as performance, privacy, and market
forces), these distributed systems rely on exchanging data and value
across network boundaries. Interconnected systems achieve a higher value
than the sum of their parts, similar to how the Internet emerged as a
set of isolated Local Area Networks (LANs) - and, by force of surprising
synergies, such networks fundamentally transformed society, forever.
Concurrently, in the last decade, we have witnessed the astonishing
development of blockchain technologies, which seem more connected than
ever: via bridges [13, 15, 16, 31], oracles [45], and other
interoperability mechanisms [4, 9, 17, 48, 89]. These recent
developments have, slowly but steadily, contributed to the improvement
of the scalability of blockchain networks, as well as providing new
functionality and use cases [66], but there is still a long way to
go until mass adoption. In this paper, we will dive into the rabbit hole
of blockchain interoperability and explain why it is needed, what has
been done in the last decade, and where it is going.