Bitcoin is a decentralised blockchain, which does peer to peer electronic transaction without the need for a centralised trusted parties like Banks or Visa network, to authorise, verify and settle the transaction.
Satoshi Nakamoto with Bitcoin (Nakamoto) brought a system where two parties can execute and validate a transaction without the need for a trusted third party. This is a revolutionary milestone which through the technology known a blockchain brings trust in the system without trusting a centralised entity, which may become fraudulent.
The blockchain is a decentralised ledger technology which maintains the history of the records intact using cryptographic primitives, data structures, distributed systems, game theory and economic modelling. Once a record is added on the blockchain, its existence cannot be destroyed.
Bitcoin with blockchain technology led to the development of many other blockchains like Ethereum(Wood), which brought the decentralised programmable contracts on the distributed ledger technology. With these programmable contracts, widely known as the smart contract, two or more parties can initiate the contract without the need of any federation.
As of April 2019, there are more than 2165 blockchain (CoinMarketCap) trying to build a blockchain solution having their own asset or cryptocurrency to run the system. Stellar(Mazières) is a decentralised remittance network which transfers money across the border in real time. Vechain (Vechain) with its blockchain technology is revolutionising the supply chain and logistics market, making the process visible, fast and secure. Cardano’s (Kant) blockchain technology is bringing the university’s degree on blockchain along with the smart contract functionality leading to various other use cases ranging from financial institutions, insurance companies, hospitals and many others.
The growth in the blockchain projects is tremendous both in size and adaptability of this technology, leading to the new trustless internet and is in the early days of development.
Each blockchain needs the entire history of the blocks (contains list of transactions), and an asset (also termed as token) to incentivise the nodes (miners) running this system, making it more like a silo environment, where only nodes can communicate among themselves and the intercommunication among different blockchains and the utilisation of one asset in another blockchain is not possible.
Figure 1.1 shows the early days of the Internet, where only the prominent institutes can initially communicate on their network and then led to
intercommunication among these networks making the Internet possible. The interoperability among the networks led to the creation of the Internet from Intranet and made it easier for someone living in one part to communicate with the another across a far distance.
Interoperability is a need for the full acceptance of the blockchain, where Bitcoin can work in Cardano blockchain and utilise the smart contract facility of that blockchain. There are many financial institutes (Allison) which are working on creating their use cases on one blockchain, but later find it difficult to move to another blockchain or communicate with another financial institution which is running on the different blockchain.
The commodities like oil act as a building block of other resources like paint or as a fuel for automobile industries. In the similar way, with an increase in the utilisation and interoperability among blockchain, this will lead to broader research and development of use cases and adaptability in different sectors.
Interoperability is one of the critical element in making blockchain development from the current Intranet to the Internet world, where the distinct decentralised network (termed as Intranet) can intercommunicate among different blockchains leading to the growth of a new Internet. The work on Sidechain (which extends the existing blockchain to a child blockchain) and cross-chain (which extend the intercommunication among distinctly working blockchains) are some of the leading advancements in making blockchain usable in different use cases.
This series will be showing the construction of a unilateral peg between two independent blockchains — Bitcoin Cash, a proof of work blockchain and Cardano, proof of stake blockchain, using the non-interactive proof of proof of work mechanism (NiPoPoW). Finally, the series will be extending the cross-chain mechanism to propose a blockchain based voting mechanism considering the Indian governance system.