Towards Blockchain Interoperability

Abstract

In recent years, distributed ledger technologies like blockchains have gained much popularity both within industry and research. Today, blockchains do not only act as the underlying technology for cryptocurrencies like Bitcoin, but have also been identified as a potentially disruptive technology in many different fields, e.g., supply chain tracking and healthcare. The widespread attention for blockchains has led to manifold research and development activities. As a result, today’s blockchain landscape is heavily fragmented, with different, incompatible technologies being available to potential users. Since interoperability between different blockchains is usually not foreseen in existing protocols and standards, functionalities like sending tokens from one participant to another, or invoking and executing smart contracts can only be carried out within a single blockchain. In this paper, we discuss the need for blockchain interoperability and how it could help to stimulate a paradigm shift from today’s closed blockchains to an open system where devices and users can interact with each other across the boundaries of blockchains. For this, we consider the areas of cross-blockchain token transfers, as well as cross-blockchain smart contract invocation and interaction.