Even though interconnectivity has transformed the modern business landscape, blockchains have struggled to bridge their own data gaps. Ally’s cross-blockchain engine provides the connectivity to pave the way for a chain-agnostic future. Read on to learn why blockchain infrastructure makes interconnectivity a challenge and how Ally’s cross-blockchain engine is solving this problem.
What is a Blockchain?
A blockchain is a decentralized, encrypted, immutable ledger consisting of a series of data organized in blocks digitally chained together. Existing blocks can’t be changed, and those that get added need to be verified before they can be included in the chain. The validity of the blocks in the blockchain is verified every few seconds. As a result, the data not only gets saved forever but it can never be altered.
Why Are There So Many Blockchains?
As blockchain technology evolves, more solutions are developed to address problems with previous blockchains. Although blockchains are maintained and upgraded to meet ever-evolving needs, people believe that they can do it better and thus develop new blockchains.
For example, even though the Bitcoin blockchain is highly secure, decentralized, and effective, it suffered from slow transactions that made it an infeasible option for a variety of different kinds of users. For instance, it’s common for a bitcoin transaction to take half an hour or longer. Imagine waiting in the store for that long just because the system takes a long time to process your payment. To solve this problem, the Ethereum blockchain was developed, enabling faster transactions without sacrificing security.
As another example, even though Ethereum enables faster payments, it has recently experienced a rise in its gas costs – the cost of each transaction. As a result, developers have built less expensive solutions, such as the Cardano blockchain. Every time the community identifies a significant problem, people start working on another blockchain solution to address it.
Blockchains for Decentralized Apps (dApps)
Another reason there are so many blockchains is the need to facilitate the creation of decentralized applications (dApps). These are apps built on blockchain technology that enable an infinite range of transactions between people and businesses. Ethereum, for example, is a popular home for dApps and it has many different tools programmers can use to create Ethereum-based applications quickly.
Some users want a dApp creation environment more suited to their specific needs, however, so more blockchains, or supplements to current blockchains, have been created. For instance, Corda has developed a blockchain-based system that provides users with many different kinds of application programming interfaces (APIs). These enable users to incorporate pre-existing apps into their overall dApp solution. This saves significant time and gives programmers stable, well-tested sets of code they can rely on throughout all phases of the development life cycle.
While new dApp creation platforms, like new cryptocurrencies, are a good thing, they can, potentially, further separate blockchain users—unless there’s a way to sync them.
Why Can’t Blockchains Currently Sync?
The infrastructure of blockchains prevents them from natively supporting cross-blockchain architecture. Because each one has its own system of verifying the legitimacy of its transactions, introducing those of another blockchain can make it difficult for the current system to determine whether those transactions are also legitimate.
Also, a centralized clearinghouse violates the blockchain principle of decentralization. In regular fiat-based commerce, a bank or a currency exchange facilitates the swap of one currency for another. For example, if you have Japanese yen and you’d like to exchange it for US dollars, you’d have to go to an exchange or a bank that accepts and issues those currencies.
You also have the option of making the exchange online using a foreign exchange brokerage. Either way, you have to pay significant fees and expend considerable time and energy just to get the currency you need.
Despite the inconveniences that come with this process, it’s what people are used to. And if it weren’t for the decentralization mandate that blockchains seek to satisfy, this could work with digital assets as well. For example, you could have a company that connects users from different blockchains for a fee. The problem is that these fees would be controlled by the exchanging entity, which could easily take advantage of user demand and hike up their costs.
Therefore, the only way to join the data and transactions of different blockchains is to create a cross-blockchain engine dedicated to this task. In this way, developers can program natural market factors, such as supply and demand, into the system. This prevents a greedy “middleman” from profiteering.
What is Cross-Blockchain?
Cross-blockchain technology is a bridge to convert and port data from one blockchain to another. This enables blockchains to interact with each other and share data. Cross-blockchain technology is increasingly necessary as more and more users engage with blockchains. This breaks down the walls between users on different chains—allowing them to exchange information with each other.
What is Ally’s Cross-Blockchain Engine?
Ally has created a universal engine that allows projects to port their tokens, protocols, smart contracts, Non-Fungible Tokens (NFTs), Decentralized Finance (Defi) products, and cryptocurrency between any platforms. This means users have the ability to log into their wallets, have their data encrypted, then control access to their blockchain transactions and data across different platforms.
For Ally’s users, this means the blockchain they use is an afterthought. In other words, if someone has their funds stored on the bitcoin blockchain, and someone paying them is using Ripple, they don’t have to worry about whether the payment will go through or if there will be significant delays. Ally’s cross-blockchain engine dissolves the barriers between different chain enthusiasts.
Working Towards a Blockchain-Agnostic World
Ally believes in a world where businesses and solutions become technology agnostic. When people and businesses are forced to use one kind of technology, it creates silos that hamper connections between individuals, companies, and other potential partners. With a blockchain-agnostic ecosystem, the barriers that divide users come down, making it easier to transact, interact, and grow together.
If you’re interested in utilizing our blockchain technology, please contact us at [email protected].