A Brief History of Blockchain Interoperability

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.