As the digital landscape evolves, the challenge of connecting disparate systems becomes ever more critical. Interoperability is not just a technical hurdle, but a strategic imperative that can redefine how value is transferred across global networks.

Strategic investors like Blockchain Capital, active since 2013 with over $2 billion in assets under management, are pivotal in driving this innovation. Their investments align with the site’s focus on cross-chain solutions, blockchain platforms, and security, as seen in prior articles like “Technologies Underlying Crosschain” on the site.

Historical Context: From Bitcoin to Multi-Chain Ecosystems

Blockchain technology debuted with Bitcoin in 2009, introducing decentralized digital currency. The landscape evolved with Ethereum’s smart contracts in 2015, followed by networks like Solana and Avalanche, each offering unique features. This diversification, while innovative, created fragmentation issues:

• Locked Liquidity: Assets are confined to their native chains, hindering cross-chain utility.
• Poor User Experience: Users manage multiple wallets, complicating interactions.
• Inefficient Resources: Redundant efforts across chains lead to suboptimal resource use.

The evolution from a single-chain environment to today’s multi-chain ecosystems has taught the industry valuable lessons on scalability and interoperability, paving the way for advanced cross-chain mechanisms.

Cross-Chain Technology: Mechanisms and Real-World Impact

Cross-chain technology includes several mechanisms to facilitate interoperability:

• Atomic Swaps: Trustless asset exchanges between chains, enhancing security.
• Bridges: Protocols like Wormhole connect chains, allowing asset transfers.
• Decentralized Oracles: Provide external data, crucial for cross-chain smart contracts, as explained in What is Cross-Chain?

Use cases are transformative:

• DeFi Liquidity Aggregation: Platforms like Aave on multiple chains (Ethereum, Polygon) aggregate liquidity, improving trading efficiency.
• NFT Interoperability: NFTs can move across chains, expanding market reach.
• Enterprise Integration: Businesses using different blockchains can share data securely, enhancing collaboration.

Beyond these established methods, emerging protocols are experimenting with hybrid models that combine aspects of layer-2 scaling with cross-chain operations, promising to reduce latency and improve transaction throughput.

Nonetheless, challenges persist such as security vulnerabilities, including bridge hacks, and governance complexities that require continuous innovation and robust regulatory frameworks.

Blockchain Capital’s Strategic Investments in Cross-Chain Innovation

Venture capital is crucial for crypto adoption, funding infrastructure projects. Blockchain Capital, as per their portfolio page, has invested in over 170 companies, focusing on blockchain-enabled technologies. Their mission is to back foundational projects, including those leveraging cross-chain tech:

• Aave: A DeFi platform on Ethereum, Polygon, and Avalanche, benefiting from cross-chain compatibility.
• EigenLayer: Focuses on restaking Ethereum assets to secure other networks, a form of cross-chain security.
• RISC Zero: Provides zero-knowledge proofs for cross-chain data verification, enhancing security.

In addition to financial backing, Blockchain Capital offers strategic guidance, ensuring that these projects not only scale technologically but also adhere to emerging industry standards and compliance measures.

Their active participation in the ecosystem underscores a broader trend where investors are increasingly seeking ventures that promise not just innovation but also sustainable growth and cross-network integration.

Future Projections: Cross-Chain’s Role in a Unified Ecosystem

The future of crypto leans toward a unified ecosystem, with cross-chain technology at its core:

• Mass Adoption of Cross-Chain DApps: As seen in projections, DApps operating across chains will become standard, improving user experience.
• Regulatory Frameworks: Emerging regulations will address cross-chain complexities, ensuring security, as noted in discussions on Cross-Chain Transfer Protocol.
• Blockchain Capital’s Vision: Their focus on scalable layer-1 and layer-2 chains, like MatterLabs (zkSync), aligns with this future, supporting interoperable networks.

Future regulatory measures are expected to further encourage innovation while ensuring that the cross-chain solutions maintain robust security and transparency. This balance between innovation and regulation will be key to mainstream adoption.

Additionally, as the technology matures, we may see more standardized protocols and industry-wide collaborations that could significantly reduce transaction times and costs, ultimately leading to a more efficient and integrated digital economy.

Synergy of Technology and Investment

Cross-chain technology is transformative, addressing fragmentation and unlocking crypto’s potential. Blockchain Capital’s strategic investments, such as in Aave and EigenLayer, exemplify this synergy, driving innovation.

The convergence of technical innovation and strategic capital not only promises to resolve current challenges but also sets the stage for a future where interoperability becomes the norm. As the ecosystem continues to evolve, ongoing investments and technological breakthroughs will likely redefine how digital assets interact across global networks.

For a deeper dive into their portfolio, explore TokenAlphabet, ensuring a comprehensive understanding of the future of interoperable blockchains and the broader digital economy.

The post Survey Note: Comprehensive Analysis of Cross-Chain Technology and Blockchain Capital’s Role appeared first on Graph Block.

In the near future, we can expect further development and improvements in crosschain protocols and platforms. This includes improvements in the security, scalability and efficiency of cross-blockchain transactions. Such improvements will not only increase the reliability and usability of crosschain solutions, but also expand their possible applications.

One of the key areas of crosschain technology development is integration with other advanced technologies such as artificial intelligence, big data and the Internet of Things. This will enable the creation of more complex and intelligent systems that can effectively communicate between different blockchains and automate a number of processes.

In finance, crosschain technologies can further facilitate the growth and development of decentralized finance (DeFi). They provide opportunities to create more complex financial products that can work across different blockchains, offering users greater flexibility and accessibility.

Crosschain technologies can also be expected to play an important role in improving global supply chains and logistics. They can help provide more transparent and efficient supply chain management by tracking the origin and movement of goods between different jurisdictions and systems.

The future of crosschain technologies may also lead to the development of new forms of government and social services, where different blockchains can interact to provide more efficient and transparent public services.

Overall, the future of crosschain technologies seems promising and full of innovation. They promise not only to improve existing blockchain systems, but also to open up new opportunities to create more integrated, efficient and smart digital solutions in a wide range of areas.

The post The Future of Crosschain Technology: New Horizons for Blockchain Integration appeared first on Graph Block.

Ethereum

Ethereum is a decentralized platform that allows you to create smart contracts and decentralized dApps. It is the second most capitalized cryptocurrency after Bitcoin.

Features:

• Ability to create smart contracts;
• support for different tokens, e.g. ERC-20, ERC-72;
• transition to Ethereum 2.0 with Proof of Stake.

Applications: dApps, DeFi, NFT.

Binance Smart Chain

A blockchain platform created by the largest cryptocurrency exchange Binance. It offers support for smart contracts and is considered one of the main alternatives to Ethereum.

Features:

• fast transaction times;
• low fees;
• Ethereum compatibility.

Applications: dApps, DeFi, NFT, bridges between blockchains.

Solana

Solana is a high-performance blockchain platform that promises fast and cheap transactions. It aims to scale without sacrificing decentralization.

Features:

• high throughput of up to 65,000 transactions per second;
• low fees;
• use of Proof of History consensus algorithm.

Applications: DeFi, NFT, gamification, decentralized applications.

Polkadot

Polkadot is a blockchain platform that connects multiple chains into a single network, allowing them to interact with each other. It was designed to improve interoperability and scalability.

Features:

• multi-chain architecture, parachains;
• Interoperability between different blockchains;
• scalability;
• security.

Applications: dApps, DeFi, internetworking.

Cardano

A blockchain platform developed with a scientific approach and based on evidence. It aims to create a more secure and scalable network for smart contracts.

Features:

• Use of a Proof of Stake algorithm called Ouroboros;
• attention to security and scalability;
• multi-layer architecture.

Applications: dApps, DeFi, supply chain management, identity management.

Avalanche

Avalanche is a platform focused on building blockchains and dApps with high scalability and performance.

Features:

• fast transaction confirmations, less than one second;
• support for creating different blockchains;
• low fees.

Applications: DeFi, NFT, institutional applications, dApps.

Tezos

A platform that focuses on self-renewal through a voting mechanism. This avoids hard forks and improves the system over time.

Features:

• self-updating platform;
• use of Liquid Proof of Stake;
• Strong focus on formal verification of smart contracts.

Applications: dApps, DeFi, NFT, governance.

The post Overview of Popular Blockchain Platforms: From Ethereum to Solana appeared first on Graph Block.

One of the main components of crosschain technologies is the creation of blockchain bridges. These bridges act as links between different blockchains, allowing the transfer of assets and data from one network to another. Bridges can be centralized, where they are managed by a single organization or group, or decentralized, where control is distributed among multiple participants.

Another important technology is the atomic swap, which allows two parties to exchange different cryptocurrencies directly, without the need to involve third parties or centralized exchange platforms. Atomic swaps ensure the safety and security of the exchange by ensuring that transactions are only executed if all the terms of the transaction are met by both parties.

Crosschain technologies also make extensive use of different types of agreements and protocols, such as messaging agreements and consensus protocols. These solutions allow information to be exchanged and data to be kept consistent across different blockchains, which is critical to maintaining the integrity and security of crosschain transactions.

Additionally, crosschain technologies have seen the use of advanced cryptographic techniques, including hashing and digital signatures, which ensure the safety and security of transactions. These techniques help to ensure that transactions cannot be altered or tampered with once they are executed.

In conclusion, the technologies underlying crosschain are a complex combination of cryptographic techniques, data exchange protocols and consensus mechanisms. They aim to create a more flexible, scalable and interconnected blockchain ecosystem that can enable the seamless exchange of assets and information between different blockchain networks.

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A crosschain, unlike a traditional blockchain, is not a separate network. Rather, it is a concept or technology designed to enable interoperability between different blockchains. Crosschain solutions seek to overcome the isolation limitations inherent in traditional blockchains by allowing assets and data to move and interact between different blockchain networks. In this way, crosschain technologies open new horizons for blockchains, extending their functionality beyond their own ecosystems.

The difference between blockchain and crosschain is also evident in their approaches to data processing and management. While blockchains are limited to their own data and rules, crosschain solutions offer a more flexible and integrated approach, allowing different blockchains to interact, share data and create collaborative ecosystems. This not only increases the potential for blockchain technologies to be used across sectors, but also highlights their potential to create global, cross-operable networks.

While blockchain remains the foundation for creating distributed, reliable and secure digital registries, crosschain represents the next step in the evolution of blockchain technology, offering the means to interconnect and integrate diverse blockchain systems into a single network.

The post How is Blockchain Different from Crosschain? appeared first on Graph Block.

Blockchain-specific governance

Blockchain is a combination of distributed ledger and blockchain data structure based on cryptographic connectivity. It helps to maintain the integrity and availability of information. However, the public blockchain network has a privacy problem. To solve it, the private blockchain model has emerged.

Private (private) blockchain has a different architecture. It uses a network access model where only strictly defined participants can make changes to the registry. The network has an operator, so it remains distributed, but can no longer be considered decentralized. This increases the confidentiality of records, because access is granted according to security policies.

There are also hybrid blockchains, where records from a private network are duplicated in a public blockchain.

On-net and off-net data security

Data minimization is a common practice for determining what data is stored on the blockchain. In addition to it, additional security measures should be applied to other objects:

• cryptographic algorithms;
• keys;
• consensus algorithms;
• smart contracts;
• network nodes.

All of these elements can be the target of attacks.

Blockchain network security

Blockchain uses network connections to interact with external networks. The technology is inextricably linked to IT infrastructure, databases, servers. Each of these elements has vulnerabilities, so blockchain is susceptible to potential non-specific threats. A security strategy should include verification of nodes and protocols, service providers.

Blockchain application security

Access to data is often realized through applications. They also represent a weakness and can be the target of an attack. Careful identification of users will help protect applications. In private blockchains, different levels of access, whitelists of users can be implemented.

Security of smart contracts

Smart contracts empower blockchain, but also create new attack vectors. A smart contract is signed using methods similar to transaction signatures and placed in a specific block of the data chain. On a public network, a smart contract can be accessed by any user who knows its address. Vulnerabilities can vary:

• code errors;
• incorrect contract logic;
• the specific blockchain environment in which the contract is executed.

The immutability principle often prevents errors from being quickly corrected because the contract is already posted on the blockchain network. Auditing smart contracts helps improve security.

Interoperability

As the blockchain grows, its infrastructure expands. Interfaces and systems become more difficult to control and interoperability issues can arise. As a result, security errors occur in different parts of the system, which can lead to unauthorized transactions and data manipulation.

Use of privacy enhancing technologies

Today, more and more methods are emerging to enhance privacy while keeping the blockchain attractive to businesses. One such method is the Panther Protocol. This is an end-to-end privacy protocol that connects blockchains. It allows privacy to be restored to Web3 and DeFi. The protocol uses selective disclosure of private information and zero-disclosure proofs.

Other techniques to improve security include differential privacy, independent identity protocols, and the use of synthetic data for modeling.

Utilize trusted auditors and third parties

Thorough auditing is an effective way to find vulnerabilities in blockchain and smart contracts. Such audits should be conducted by competent organizations with a high level of trust from customers. H-X Technologies conducts security compliance audits, smart contract audits and source code audits.

Conclusion

Due to its distributed and decentralized nature, blockchain has a lot of advantages for businesses. However, these same principles leave quite a few vulnerabilities that are often exploited by attackers. A sound security strategy and regular audits can help combat attacks.

The post Mitigation and Security Best Practices for Specific Blockchains appeared first on Graph Block.

Blockchain security is a complex topic. It is important to understand the basic concepts and mechanisms that ensure that these systems are secure. To increase security and keep it at a high level, various actions discussed below will help.

Since the early forerunners of the 90’s and since its emergence in 2008, blockchain has changed significantly. In 2021, interest in blockchain has grown significantly. Many government institutions in different countries have started using the technology. The idea of a decentralized financial system is gaining more and more support. Distributed registries and cryptocurrency economy are at the heart of the development of the new generation of the Internet.

The development of blockchain technology and the growing interest in it have led to new security challenges. In 2022, the amount of losses due to blockchain attacks exceeded $9 billion, the most attacks recorded in a year since the blockchain has existed.

Despite its high level of protection against traditional hacker attacks, blockchain has a number of vulnerabilities that attackers exploit. In addition to common phishing, blockchain is subject to specific threats unique to this technology: 51% attacks, hacking attempts, private key theft, Race and Finney attacks.

Blockchain uses the principle of decentralization, so there is no single person in charge of security. In a world of distributed ledger and decentralized applications, it is the responsibility of each user. Organizations and businesses using blockchain must think about a security strategy to withstand attacks.

Attackers can target different blockchain systems used to interact with applications, cryptoassets or identity management. Phishing, an old but effective method, is often used to gain unauthorized access to corporate networks and steal private keys.

It’s easy enough to counteract, but it’s important for businesses to train employees and implement a culture of digital security. Using secure email, secure authentication, and regular security updates are basic steps necessary for blockchain security.

These practices are applicable to any blockchain:

• Using two-factor authentication;
• whitelisting of trusted senders and receivers;
• secure storage of private keys;
• installing security updates and patches;
• using a hardware wallet (cold storage);
• using a VPN.

More specific steps are used to improve the security of a particular blockchain.

The post How to Protect Blockchain: Challenges and Solutions appeared first on Graph Block.

Components of soft fork

Backward Compatibility: The main feature of Soft Fork is that it does not invalidate blocks mined by nodes that have not upgraded. This ensures that all participants can still verify transactions and blocks even if they are not up to date.

Consensus rules: A soft fork modifies the consensus rules to tighten them. For example, it may make some transactions that were previously acceptable now invalid, requiring all nodes to follow the new rules to maintain the integrity of the network.

Implementation Process: The Soft Fork implementation process typically involves:

• Proposing changes through improvement proposals (often called BIPs in the Bitcoin community);
• Gathering support from the community and developers to reach consensus on the proposed changes;
• Deploying the update throughout the network while ensuring that nodes that are not updated are functional.

Types of soft forks

Soft forks activated by miners (MASF): These require miners to signal their support for the proposed change. If a sufficient percentage of miners signal approval, the soft fork goes into effect.

User activated soft forks (UASF): In this case, a community of users, not just miners, initiates a soft fork. Users can apply the new rules while refusing to accept blocks mined under the old rules.

Examples of soft forks

Bitcoin’s Segregated Witness (SegWit): One of the most famous examples of Soft Fork, SegWit was implemented to increase the block size limit by separating signature data from transaction data. This change increased transaction throughput while maintaining backwards compatibility.

Bitcoin Cash complexity adjustment algorithm: This soft fork aimed to adjust the mining complexity more frequently to allow for smoother block production, thus making the network more efficient without splitting the chain.

New trends in soft forks

Focus on improving privacy: Recent soft forks are increasingly focusing on improving user privacy. Protocols such as Mimblewimble are being explored as soft forks to improve transaction privacy.

Interoperability: As blockchain ecosystems grow, soft forks are being developed to improve interoperability between different blockchains, enabling seamless transactions and communication.

Related Methods and Strategies

Governance models: Soft forks often require robust governance models to ensure community consensus. This may include mechanisms for community voting and discussion.

Testing and Simulation: Extensive testing and simulation is conducted prior to Soft Fork deployment to ensure that changes do not disrupt the network. This includes stress testing the new rules under various conditions.

Conclusion

Soft Forks represent an important aspect of blockchain evolution, allowing networks to adapt and update without losing compatibility with older nodes. As the technology continues to evolve, understanding soft forks will be vital for anyone involved in blockchain, cryptocurrency or decentralized finance. They offer innovative solutions while maintaining the integrity of the community, paving the way for future developments in the ever-evolving blockchain technology landscape.

The post Understanding Soft Forks is Key to Blockchain’s Evolution appeared first on Graph Block.

Blockchain development requires specialized tools that allow you to build, test, and deploy smart contracts and decentralized applications (dApps). These tools help simplify the development process and ensure the security and reliability of the solutions created. In this article, we will take a closer look at the various development environments, libraries, frameworks, and platforms that can be useful for blockchain developers.

Development Environments (IDEs) for Blockchains

Remix IDE

Remix IDE is a web interface for developing smart contracts in the Solidity language. It provides a user-friendly interface for writing, compiling, and debugging smart contracts. Remix supports integration with various blockchains and allows you to test contracts on a local or test network.

Remix IDE is one of the most popular tools for developing smart contracts on Ethereum. It offers many features such as automatic compilation, syntax checking, and integration with various testing and deployment tools. With its simplicity and convenience, Remix IDE is a great choice for beginner developers.

Truffle Suite

Truffle Suite is a powerful tool for developing, testing and deploying smart contracts. It includes several components:

• Truffle: a framework for developing smart contracts;
• Ganache: a local blockchain network for testing;
• Drizzle: a library for integrating smart contracts with the frontend.

Truffle Suite provides a complete set of tools for blockchain development. Truffle makes it easy to create and manage projects and automate the deployment of smart contracts. Ganache provides the ability to test contracts in an on-premises environment to speed up the development process. Drizzle simplifies the integration of smart contracts with the user interface, making the development of dApps more convenient.

Visual Studio Code with extensions

Visual Studio Code (VS Code) is a popular code editor that can be customized for blockchain development with various extensions. For example, the Solidity extension allows you to write, compile, and debug smart contracts directly in VS Code.

VS Code is a powerful and flexible development tool, and it can be customized to work with a variety of programming languages and technologies. Blockchain development extensions such as Solidity and Truffle make VS Code a great choice for smart contract developers. VS Code also supports integration with version control systems to simplify project management.

Conclusion

Blockchain development tools play a key role in building and managing decentralized applications. In this article, we have covered the main tools that will help you get started in this field. Use them to develop, test, and deploy your projects, and you’ll quickly learn the ins and outs of blockchain technology.

The post Blockchain Development Tools appeared first on Graph Block.

Sharding is a database scaling technology, the basic idea of which is to break the database into separate segments, each of which can be placed on a separate server.

Applying this technology to blockchain, sharding is the division of the network into separate sectors. Each sector (shard) contains a unique set of smart contracts and account balances, and each shard is assigned certain nodes in the network. These nodes are responsible for verifying transactions in that shard only, not all transactions on the blockchain.

What problems sharding solves

The more popular a project becomes, the more users it attracts, and they, in turn, conduct a lot of transactions, launch dApps and other processes on the network. As a result, the speed of transactions drops, commissions grow, and all this becomes an obstacle for the expansion and development of the project in the future. Dividing the network into shards (also called shards) allows you to increase the capacity of the blockchain and thus solve this problem.

When a group of nodes is responsible for a specific segment of the registry, each node in the network no longer needs to maintain the entire blockchain to perform each transaction. Transaction validation is performed in parallel rather than linearly, which increases network throughput. As a result, the scaling problem disappears.

In addition, in blockchains that utilize sharding, due to load reduction, nodes run more efficiently without increasing computational power.

How it all works

Blockchains are made up of thousands of computers, whose computing power enables distributed registries to function: conducting transactions, executing smart contracts, deploying dApps, etc.
If the network functions on the basis of sequential execution, each node must process each transaction. Therefore, verification of transactions takes quite a long time. For example, Ethereum processes about 10 transactions/sec.

Adding nodes to a blockchain does not mean that its performance will increase. It just means that the verification chain will become longer.

The essence of sharding is to abandon the linear execution model in favor of a parallel one, in which shards do only certain calculations and process a large number of transactions simultaneously. Such blockchains in the blockchain, all information from which is transferred to the main blockchain, but already in a reduced form.

Minuses of sharding

The main problems of sharding are two: communication between shards and security.

Communication.If we divide the network into isolated shards, each shard will essentially become a separate blockchain. Users and decentralized applications of one shard will only be able to communicate with users and applications of another using a special communication protocol.
Security. In a segmented network, it is much easier to take full control of a single shard, as it requires much less hash rate than taking over an unallocated network. For example, a 51% attack on a Bitcoin network would require billions of dollars in hardware and hundreds of millions of dollars a day in electricity.Expensive, unprofitable, unfeasible.Taking over a single shard, on the other hand, is much cheaper and easier.

Which networks are already using sharding

The first network to implement sharding is Zilliqa. It positions itself as a blockchain platform that aims to use segmentation to solve scalability problems.In its testnet phase, it was able to achieve a figure of 2,828 transactions/sec.

The Near blockchain ecosystem calls itself a “sharded blockchain on PoS” and claims that their sharding technology enables nodes to stay small enough to use a low-performance device to operate.
Ethereum is also looking to implement sharding technology. Other sharding networks include Cardano, QuarkChain, and PChain, among others.

Bottom line

In theory, sharding technology could finally solve the blockchain trilemma – if it overcomes the challenges it faces.

Blockchains could then be scaled without sacrificing decentralization or security.

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