Blockchain 2.0 Inches Closer

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When e-commerce via the Web began, each e-commerce site was an island unto itself where developers kept re-inventing the wheel for each site.

It wasn’t until mashups started to arrive after the turn of the 21st Century that e-commerce truly took off. Developers could now incorporate the best-of-breed services into their work, which upped websites’ user experience significantly as well as adding a wide variety of new capabilities.

Blockchain is approaching a similar tipping point. The current proofs-of-concept in financial services focus on the digital asset or service are tightly tied to their respective blockchains deployed by digital exchanges or business consortiums.

Ethereum is the exception as many initiatives base their smart contracts on Ethereum’s ERC-20 smart contract framework. 

However, for those not wanting to adopt the Ethereum architecture for reasons regarding design, performance, or security, the alternative has been limited to the use of atomic swaps between blockchains, which has been around since 2014.

The technology is useful for settlement, but is a relatively slow process, noted Neha Narula, director, digital currency initiative at the MIT Media Lab, during the Securities and Exchange Commission’s FinTech Forum in May.

Linking transactions on multiple chains and creating more complex digital assets is coming closer to reality.

CoinDesk reported that Blockade Games bridged Bitcoin’s and Ethereum’s networks in which a transaction on the Bitcoin Lightning Network triggered a smart contract on Ethereum.

The test took place on the Rinkeby testnet, but the game company plans to move it on the mainnet environment using real ether in the coming weeks, Ben Heidorn, CTO of Blockade Games told the author of the CoinDesk story Alyssa Hertig.

Linking the most popular digital currency with the most popular blockchain architecture is a logical first step. It will not be long before it opens the sluice gates for other applications to adopt similar capabilities on Ethereum.

Imagine what financial engineers could develop linking digital assets from one blockchain to digital assets and smart contracts residing on other blockchains. It hurts to think about it.

Will it happen overnight? It’s highly doubtful. Knowing that developers accomplished it once, should drive efforts forward considerably.