Cross-network asset transfer has been around for several years. The concept was developed after many blockchains were developed and used. In the first application, remittances focused on exchanges between the original network assets and tokens, which later led to many decentralized exchanges. While asset swaps have their advantages, simply transferring assets and other data over the blockchain without changing their identity is equally important, and this practice is becoming more and more frequent.
Currently, the number of bitcoins (BTC) is growing and they are used in transactions outside the Bitcoin blockchain. A significant amount of Ether (ETH) has also been transferred to other networks. Some of these encapsulated tokens are specified to separate them from the same resource when they are on their original network. Transfer of original assets from the oldest blockchain to the new one through the so-called bridges.
However, the processes developed are not standardized, tend to focus mainly on one-way transmission to newer networks, can involve significant delays or lost cost, and navigation is usually not easy for end users.
Ongoing efforts to transfer net worth between block chains
In addition to the bridges created by new blockchains to facilitate the transfer of the original assets from the old chains, other work is underway in this direction. This includes some blockchains that have specific protocols between the blockchains, but are more geared towards user-generated alternate versions of the same blockchain.
While they may have advantages, they are unlikely to be the dominant solution, and most companies are less likely to build their own networks than companies setting up their own small banks to access high-quality financial services. It is also unlikely that solutions involving a single blockchain that acts as a blockchain manager to transfer value between all other blockchains will benefit.
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The role of the standard in the development of blockchain technology
The development of standards and protocols among professionals in any technology usually leads to overall progress, ease of use, and improved applications, and also benefits end users by offering consistent functionality across vendors. For blockchains, the standards are well known.
The whole spirit of a decentralized blockchain network is to adopt a standard in and of itself: an agreement by an independent group of nodes in a decentralized manner to run the same code or standard so that they can reach consensus on a shared ledger. Other standards in blockchain have already led to significant growth in some use cases. Two of these examples are the ERC-20 and ERC-721 standards. These two standards have accelerated significant growth in technology development in the ways described below.
ERC-20 standards. This standard was developed on the Ethereum network to identify a token and includes the ways such tokens can provide them to comply with the standard. The standard is implemented outside the Ethereum blockchain. The operation of this criterion is achieved in many obvious and some not so obvious ways.
What’s most obvious is how easy it is to distribute tokens with less technical skill than no standard. This sparked the first surge in coin supply, which peaked in 2017, but they are still being used to produce tokens, some of which have proven to be more useful than others. Less obvious, this standard demonstrates the benefits that exchanges can list tokens that conform to the standard, as well as for users to transfer those tokens to multiple blockchain wallet applications that follow the standard.
ERC-721 standards. This standard was designed to identify non-fungible tokens (NFT) or, more simply, unique numeric items. Like ERC-20, compliance with this standard allows for the standardization of the interpretation of unique asset tokens on devices and applications, regardless of the blockchain on which they are created.
Since then, the standard has seen a rise in NFTs in 2021. In addition to its use to encode digital art, the implementation of this standard is now driving the growth of NFTs in the gaming industry and giving rise to pay-for-profit gaming. phenomenon. This versatile enclosure is a growing part of the gaming industry and seems to be attracting new players from around the world.
The two examples above illustrate the impact of widely accepted standards in the blockchain industry on growth and user adoption. The criteria for the transfer of value between blockchains will also benefit end users.