With the rapid growth of the digital economy, blockchain infrastructure is also evolving rapidly. Various public chains, consortium chains, and permissioned chains have sprung up, demonstrating the diversity and innovation of technology. However, a prominent problem is that the chains cannot be connected and interoperable due to factors such as technology, ecology, and competition. This has led to the segmentation of users, assets, applications, and data in different blockchain ecosystems, forming the so-called "island effect."
Fundamentally speaking, there are two main reasons for the formation of the "island effect": one is the diversification of user needs, and the other is the scalability limitations of blockchain. These factors together hinder the organic integration of different blockchain ecosystems. In order to break the "island effect" and promote the efficient circulation of business and value of blockchain projects, cross-chain technology came into being.
Inter-Blockchain technology can effectively solve the problem of value loss and double payment in the process of data synchronization between ledgers. It not only improves the interoperability and scalability between different blockchains, but also realizes the circulation of assets and value. This article will give you a comprehensive introduction to the current forms of major inter-blockchain technologies.
Cross-chain technology implementation
For two independent and relatively closed blockchain systems, achieving cross-chain interaction involves several key issues. First, we need to verify the transaction status on the original chain to ensure that it is accurate. Second, we must design an information transmission mechanism to ensure that information is accurately and timely transmitted during the cross-chain process. Next, we need to solve the problem of how to confirm transactions on the other chain and how to prevent double payments.
At present, cross-chain technologies can be mainly divided into the following four categories according to different locking verification methods:
Notary Schemes: Verify and confirm transactions through a third-party notary;
Sidechains/Relays: Use sidechains or relay chains to realize the interaction between different main chains;
Hash-Locking: Ensure the security of transactions through specific hash locking technology;
Distributed Private Key Control: Control access and verification of transactions through distributed private key management.
These technologies each have their own advantages and characteristics, providing diverse choices and flexibility for achieving interoperability between different blockchain systems. The following is an introduction to each of them:
Notary Mechanism
The notary mechanism is to select a relatively independent node or a group of nodes that are mutually trusted by both parties to act as a notary as an intermediary to verify and ensure the legitimacy of the transaction when the two parties cannot trust each other. As the connector between the two parties, the notary needs to track the data status of the two chains at the same time and inform the two parties of the transaction when exchanging or transferring assets between chains. The two parties completely rely on the information transmitted by the notary to make judgments and realize transactions.
(Figure 1: Schematic diagram of notary mechanism)
According to the selection of notaries, it can be divided into single-signature notary mechanism, multi-signature notary mechanism and distributed signature notary mechanism:
The single-signature notary mechanism is to select a single independent node or organization as the notary, which is the simplest model.
The multi-signature notary mechanism requires multiple notaries to sign on their respective ledgers to reach a consensus before cross-chain transactions can be realized. This mechanism improves the centralization problem of the single-signature notary mechanism and improves the credibility of the notary, but the mechanism requires the transaction chain to have the function of supporting multiple signatures at the same time.
The distributed signature notary mechanism is based on cryptography to generate a key, which is then split into multiple parts and distributed to randomly selected notaries. A certain proportion of notaries are allowed to sign together to piece together the complete key. The implementation of this mechanism is relatively complex, but it is also relatively safe and reduces the risk of single point failure.
The notary mechanism is one of the easier ways to achieve interoperability between blockchains. It does not require complex proof of work or proof of equity, and is easy to connect to existing blockchain systems. In addition, this mechanism is a relatively centralized cross-chain processing solution, and its operation and processing efficiency is relatively high. However, the notary mechanism has the risk of centralization, that is, once the notary is attacked and cannot be trusted, the overall notarization system will stagnate or be at a greater security risk, and there is a serious risk of single point failure. Although the industry has proposed multi-signature and distributed signature notary mechanisms to weaken the risk of centralization, there is still a potential risk of malicious behavior, which is only a trade-off solution at present.
Sidechain/Relay
Sidechains are mainly aimed at two isomorphic chains, that is, one blockchain system can understand the system architecture of another blockchain, and automatically release tokens after obtaining the lock transaction proof provided by the other blockchain system. Generally, asset transfer is achieved through a two-way anchoring mechanism. However, in fact, the assets are not really transferred. It is just that when the assets are locked on the original chain, the same amount of equivalent assets are released on the other chain, and when the assets are locked on the other chain, the assets on the original chain will be released.
(Figure 2: Schematic diagram of two-way anchoring, source: "Enabling Blockchain Innovations with Pegged Sidechains")
Side chain technology is a concept relative to the main chain. The side chain requires a smart contract to obtain data from the main chain network, which includes the method of switching mechanism between side chain data and main chain data. The main chain and other side chains can be connected through smart contracts. to interact. Relay technology is generally suitable for linking two heterogeneous or homogeneous blockchains. It is a more direct way to achieve interoperability, that is, it does not completely rely on the verification judgment of a trusted third party and only collects two blocks through an intermediary. The data status of the chain is read within the chain and self-verified. The verification methods vary significantly depending on the structure of the chain. The middleman here only acts as a relay bridge and is responsible for data collection.
Whether it is a side chain or a relay, the most basic requirement is to collect information from the original chain. The difference between a side chain and a relay is that: in terms of subordinate relationship, the side chain is anchored to the main chain, and is a solution for trustless interaction between the main chain and the subsidiary chain, and is limited between the main chain and the side chain, focusing more on extensibility rather than scalability, while the relay adopts a hub-and-spoke design, is not subordinate to a certain main chain, and is more like a "dispatching center", which is only responsible for data transmission and not chain maintenance; in terms of the execution process, the side chain needs to synchronize all block headers to verify whether the network recognizes the transaction, and the relay does not need to download all block headers, so it has a better speed; in addition, in terms of security, the security of the side chain is based on the fact that the side chain can effectively incentivize miners to perform consistency verification transactions, and the security of the main chain cannot work on the side chain, while the relay is verified by the main chain itself, and the security is guaranteed to a certain extent.
In general, the sidechain/relay model has higher costs and lower efficiency. This is because in this model, it is necessary to wait for information to be uploaded to the chain and to confirm that there will be no rollback before it can be confirmed.
Hash Lock
The full name of hash lock is Hash timelock contract, which is a cross-chain technology solution that uses hash lock and time lock to complete inter-chain asset exchange without the need for a trusted notary.
Hash locking first appeared in Bitcoin's Lightning Network, which achieves fair transactions by locking assets and setting corresponding time and unlocking conditions. Hash locking can build multiple different off-chain payment channels, allowing these channels to form a network together. Micropayments with relatively small numbers between the two parties can be completed through a series of off-chain protocols, thereby expanding the performance of the main chain and achieving the purpose of cross-chain.
(Figure 3: Schematic diagram of hash time lock)
Hash locking is the basic framework for atomic transactions between systems. It ensures the atomicity of cross-chain transactions, that is, either success or failure, and there is no third state. It can be extended to systems with centralized or decentralized ledgers. However, hash locking can only achieve cross-chain asset swaps, that is, the total amount of assets on each chain remains unchanged, but the asset holder changes, but it cannot actually transfer assets to another chain. Therefore, asset transfers need to be combined with other cross-chain technologies. On the other hand, a more complete protocol is needed to form a large-scale network.
Distributed private key control
Distributed private key control is a technology based on multi-party computing and threshold keys in cryptography. It uses distributed nodes to control the private keys of various assets in the blockchain system, separates the use rights and ownership of digital assets, and enables the control of on-chain assets to be securely transferred to a decentralized system. At the same time, the assets on the original chain are mapped to the cross-chain to achieve asset circulation and value transfer between different blockchain systems.
The implementation process of distributed private key control is to use a built-in asset template based on the blockchain protocol to deploy a new smart contract based on cross-chain transaction information to create new cryptocurrency assets. When a registered asset is transferred from the original chain to the target chain, the cross-chain node will issue the corresponding equivalent tokens to the user in the existing contract, ensuring that the original chain assets can still be traded and circulated on the cross-chain.
In 2017, Fusion proposed to use the distributed private key control mode to process cross-chain transactions to support multi-platform cross-chain asset transfers, thereby building a basic platform for the operation of encrypted financial applications. That is, by placing the private keys of each digital asset under the control of distributed nodes, the ownership and usage rights are separated, and through Lock-in and Lock-out, fusion is made a side chain of all existing blockchains, and the tokens of existing blockchains are mapped to the fusion public chain, so that all tokens are interoperable on the same chain.
(Figure 4: Fusion Lock-in diagram, source: Fusion White Paper)
Distributed private key control is similar to the notary mechanism, but users always have control over their assets. It is just that the distributed storage method is used to store the keys of digital assets, which avoids the centralization risk under the notary model to a certain extent. In addition, the account locking mechanism does not need to adopt a two-way anchoring method. All transactions are transmitted to the original chain network after the verification node is reconstructed, without changing the characteristics of the original chain. For this reason, each chain can freely access the chain with a low threshold, reducing the cost of cross-chain access. However, since the original chain is not changed, the cross-chain needs to be adapted and developed according to the characteristics of the original chain, and the cross-chain speed will also be affected by factors such as the transaction confirmation time of the original chain.
Summary of cross-chain technology
In short, cross-chain technology is to achieve information transmission and linkage between blockchains. In the early days, cross-chain technology was mainly focused on asset transfer, such as notary mechanism and side chain/relay technology. These technologies require users or third parties to make more agreements and operations outside the chain, but can improve the transaction efficiency of the original chain and achieve underlying expansion.
As time goes by, later projects begin to pay more attention to the underlying cross-chain infrastructure, starting from the underlying structure of the blockchain to construct the cross-chain technology of the chain structure. The following table briefly summarizes the advantages and disadvantages of four different cross-chain technologies:
(Figure 5: Comparison of the advantages and disadvantages of mainstream cross-chain technologies)
With the continuous development of cross-chain technology, solutions on the market usually apply multiple cross-chain technologies in combination to improve the performance, security and interoperability of cross-chain interactions. For example, the hybrid technology that combines the notary mechanism and the sidechain (notary scheme + sidechains mixing technology) fully utilizes the advantages of both, improves the communication efficiency between blockchain systems, supports cross-chain asset interaction and asset mortgage, realizes the publicization of distributed nodes, and avoids centralized control.
In general, cross-chain blockchain technology is a technology full of vitality and potential that is changing our understanding and use of blockchain. From side chains to notary mechanisms, from hash time locks to distributed private key control, the diversification of cross-chain technology provides new opportunities and solutions for finance, law, medicine and other fields.
However, although blockchain interoperability is a foreseeable future, cross-chain systems or solutions still face some challenges, such as "trust differences" and "transaction rate bottlenecks." Future cross-chain technology research and development will require more innovation, cooperation, and regulatory support.
