Web3 Interoperability: How Platforms Like The Internet Computer Can Converge With Other Chains & Protocols?
In my previous article, I wrote about cross-chain bridges and the concepts of bridging blockchains so that different ecosystems can interact, develop, transact, and trade with each other in a seamless and safe manner.
In this article, I’ll be building on this momentum by talking about and giving specific examples of how the Internet Computer can be the ultimate interoperable blockchain and ‘metachain’ to bring them all together, beginning with Bitcoin and Ethereum — and ending with a smaller more specific example about NFTs.
Why The Internet Computer Is The Metachain
Many blockchains develop in isolation and are modular in nature which means they have limited capabilities and functions that may in some way restrict their development. The Internet Computer, however, has the capability to interact and directly integrate with other chains and protocols because of cryptographic technologies and blockchain innovations such as Chain Key Cryptography and the Reverse Gas Model.
Chain Key Cryptography in particular makes blockchain integration possible because it gives other blockchains Internet Computer capabilities by allowing smart contracts on the Internet Computer to initiate transactions and computations directly on the Bitcoin blockchain (for example).
So developers and potential Web3 users don’t need to wonder and research if there’s a blockchain that can interact with them all because it’s right in front of you — the Internet Computer.
What Blockchains Is The Internet Computer Integrating With?
The Internet Computer is currently working on directly integrating with two blockchains — Bitcoin and Ethereum. But why?
Near Term: Integrating With The Bitcoin Network
Because the Bitcoin network is simple by design and cannot host true smart contracts, it limits itself to fewer functionalities. Thus, it’s taken on the form of being a store of value and a huge pool of liquidity (or monetary value).
As a reminder, even in the current bear market, which may be crypto’s most difficult moment ever, Bitcoin still holds a market cap of $360 billion. So this means there are thousands and thousands of wallets currently holding Bitcoin, but with no way to earn yield, give out loans, or make productive investments. This is proven by Bitcoin’s lack of a DeFi ecosystem of its own.
However, Bitcoin can be used on other chains such as Ethereum in the form of wBTC, but this is only made possible by porting BTC using often insecure and centralized blockchain bridges (wrapping services). Moreover, the wrapped versions of Bitcoin on other chains are not real Bitcoin per se.
This is one reason why the Internet Computer is working to directly integrate with Bitcoin — so that investors, traders, DeFi enthusiasts, and Web3 users can have native Bitcoin in their DeFi applications.
The Internet Computer’s direct integration with Bitcoin is made possible via Chain Key Cryptography and Threshold ECDSA where Internet Computer smart contracts have the ability to process BTC directly on the Bitcoin ledger without the need for any kind of intermediary. Moreover, if you’re a regular user, you can create new Bitcoin addresses, and send and receive Bitcoin vis-a-vis these smart contracts on the Internet Computer as if you were using the Bitcoin network itself.
So now if a decentralized exchange (DEX) or any other type of Internet Computer DApp wants to employ Bitcoin in their services or trading pairs or liquidity pools, they can actually do it.
In summary, the Internet Computer taking the giant leap of faith to integrate directly with the Bitcoin blockchain will have ripple effects across the industry as other blockchains may attempt to make similar moves. However, it may not be possible. The Internet Computer, on the other hand, will have a head start and already be on its way to making the next integration with Ethereum.
Medium-Long Term: Integrating With The Ethereum Blockchain
Ethereum was the second major blockchain to launch after Bitcoin, but with added functionality through an innovation called smart contracts which could process and store data on the blockchain itself.
Ethereum is more of a major step in the sense of developing a decentralized Web3 world free of Web2 and TradFi intermediaries. But it has struggled technically in solving the blockchain dilemma of being secure, scalable, low-cost, and decentralized.
Ethereum is great and all, but it’s not capable of serving interactive web experiences that users can interact with on their computers or phones. Moreover, Ethereum uses traditional cloud computing infrastructure and IT to deliver services and DApps, and for data processing and storage. So the network is exposed to the Web2 weaknesses that Web3 is trying to innovate and move on from such as censorship and security hacks.
This is why the Internet Computer is working on an idea to help Ethereum DeFi and Web3 services move on-chain. For example, the front-end UX of an app can be built using Internet Computer smart contracts and be programmed to respond to end user inputs and transactions on Ethereum.
In summary, the Internet Computer can be the scaling solution and oracle (through HTTPS outcalls) for the Ethereum blockchain. This is because the Internet Computer has limitless flexibility to integrate itself with any blockchain. The Ethereum chain just happens to be an excellent partner that will surely benefit both networks.
Integrating With Polygon: ORIGYN NFTs Up Next
Lastly, and perhaps most interestingly, a developer at the ORIGYN Foundation made a Smart Pier transaction between the Internet Computer and Polygon’s Mumbai Testnet. This signifies that smart contracts on the Internet Computer can control, publish, and interact with any EVM chain without a bridge. ORIGYN will be using this tech and transaction method to bring non-Internet Computer NFTs to the Internet Computer blockchain as well as bring Internet Computer NFTs to well-known marketplaces on EVM chains.
Is The Internet Computer Introducing A Layer-Zero World?
These are just a few examples of how the Internet Computer is working to create direct integrations with the world’s largest blockchains and to enable asset transfer between ecosystems. During the bear market is when building out this functionality is most important, and won’t be reflected in the price until the next bull run. Nonetheless, the Internet Computer (through these examples alone) is appearing and taking shape to become the blockchain of choice for integration in a multi-chain world.