The world has changed a lot, and it is increasing its efficiency day by day. The usage of the internet seems to be an essential factor that is used by millions of people, and many users get several advantages because of the internet. The internet is getting driven to its next generation by blockchain technology, which has become a part of important aspects for many business people. Even though there are numerous challenges faced and overcome in blockchain in the form of interoperability and scalability, there are solutions to those challenges. One of the solutions is Cross-chain technology. In this post, you will look at how cross-chain technology works.
What is cross-chain technology?
Inside of blockchain technology, there are different kinds of chains, and when there is any development and rise in blockchain, automatically, the chains inside it are also raised. The blockchain was started to be adopted by small, large or start-up businesses, and they are looking for a solution for the interoperability issues between blockchain. And the ultimate solution for those issues is cross-chain technology, and the need for this technology increases every day. For communicating with other blockchain networks, Cross-Chain integration is essential, and to enjoy the full benefits of blockchain technology by the user, cross-chain technology is required.
How does cross-chain technology work?
Cross-chain technology needs some approaches, and different networks use different approaches to have effective cross-chain communication.
- Atomic swaps;
As the two chains would not communicate, atomic swaps are not a true form of cross-chain communication. However, the mechanism enables users to organize transactions across chains, allowing for the direct exchange of one cryptocurrency in a peer-to-peer transaction.
- Stateless SPVs:
The blockchain involves numerous contracts and transactions, and it enables a sufficiently complicated smart contract to validate a subset of Proof of Work history. Because stateless SPVs are relatively inexpensive, they can be adapted to a wide range of use cases. Cross-chain integration is used for the communication between parachains within a specified network.
Relays enable a smart contract on one chain to validate events that have occurred on other chains. Verifying the complete history of a chain and verifying some specific topic that is on-demand is possible when there is a relay. The relay method employs trade-offs between relay security and operational cost, and relay is considered quite expensive but worth able.
- Merged consensus:
Interoperability between chains is a simple thing, and that is sharing the information between different blockchain smoothly, and another method can be used in cross-chain technology for that. The merged consensus is another method, and many popular projects use this method for allowing interoperability between chains in two ways.
Usually, there are some risks in centralized third parties, and you can solve those problems. The events of each chain may have some similarities, and some differences can be confirmed by the specified trusted parties who can leverage federations. Federations are very effective when they get a trustable third party.
Thus, the details mentioned earlier are some of the methodology and approaches which tell you how cross-chain technology works. So when you are using blockchain technology, have this cross-chain technology also.