Decentralization is at the core of any concept related to blockchains. That said, before you can understand what the Internet of blockchains is, you need to know what decentralization and a blockchain are.
A blockchain is a specific kind of database that stores information in blocks that are then chained together, hence the name. Each block has a specific storage capacity, and when it gets filled, another block is created to store more data. Every new block is joined to the last in the chain in chronological order. While a blockchain can store many types of information, it is more commonly used to hold financial data today, specifically for cryptocurrencies.
You may be wondering where decentralization comes in. No single person controls or manages a blockchain. Hence it is described as decentralized. All of the users of a blockchain instead have a hand in controlling it, but no one can change any information stored on it after it has been added, making a blockchain safe.
Now that you know the basics, we can move on to the nitty-gritty of the Internet of blockchains.
What Is the Internet of Blockchains?
The Internet of blockchains came about because a single blockchain just won’t cut it. As the number of users increases, the amount of data stored in each blockchain rises, resulting in the need for more blockchains.
A few projects in the blockchain space are in the works to bring distributed ledgers closer to one another. These blockchains will be connected as a network to allow programmers to innovate and make quick value transfers and seamless scalability possible.
One such project is Cosmos, which has undergone an initial coin offering (ICO) recently that raised more than US$17 million in around 30 minutes. For the uninitiated, an ICO is the cryptocurrency world’s equivalent of an initial public offering (IPO), where investors put in money to keep a project or company going.
More information on Cosmos can be found on its website.
Cosmos isn’t the only one of its kind that is currently in the works, though. Polkadot and Ethereum are also developing their own Internet of blockchains. Ethereum’s network is known as “Polygon.” There are others, of course, such as Quorum.
Why Build an Internet of Blockchains?
We talked about the primary reason why companies are developing the Internet of blockchains earlier. But there are others, and they could be the same ones for building blockchains in the first place.
Every user who is part of a blockchain has a public address that, though in no way identifies them, is entirely open. Any other user of that blockchain can thus see their holdings and transactions anytime. That completely differs from how banks and other financial service providers work. No one else except the account holder and the bank’s authorized employees can see all of his/her transactions.
This level of transparency allows users to feel more trusting as they can track all of the movements everyone in the blockchain makes. No one can move their properties without being seen by everyone else.
All blockchain transactions require the agreement of everyone in it. So parties that want to exchange coins on it, for instance, can do so with every member as a witness to the agreement. Once both parties express their consent, the transaction can instantly be carried out after approval is given by all of the blockchain’s users.
Seemingly instantaneous transactions like these make blockchains more operationally efficient for all users.
All of the transactions made through a blockchain are encrypted. And no exchanges are left unrecorded or undocumented. No transactions made through a blockchain can be reversed as well.
These features make blockchains very attractive to users who are very concerned about security. Only the ones who hold the decryption keys can see the contents of encrypted data.
To date, Cosmos and Polygon are already operational. We hope these technologies will hold to their promise—the possibility of chaining not just blocks together but entire blockchains to ensure interchain communication. Like every new technology, though, we expect them to have a few problems along the way.