The blockchain industry market size was estimated by some to be more than $ 21 billion by 2025. The market capitalization of the entire cryptocurrency market is already over $ 1.9 trillion. An ecosystem once defined by its close community and exclusivity is now reaching governments, corporations, institutional investors and individuals, all of whom are more positive about the developing space.
With this new popularity, a crossroad has emerged. We have reached the stage of adoption where the number of users using decentralized technology exceeds the functionality of the technology itself. This has led to regularly overloaded networks and a demand for solutions.
Many of the barriers we are experiencing could easily be solved with scaling solutions such as bridges, parachains and other features that create seamless transitions for Web 3.0 users and depend solely on a shared vision of a multichain approach for the next wave of blockchain adoption .
Related: A future with multiple chains will accelerate innovators and entrepreneurs
Scalability: The Ethereum Challenge
Today almost all DeFi projects are based on the Ethereum blockchain, which makes it the standard standard blockchain for many decentralized applications (DApps) and protocols. However, Ethereum’s scalability has posed many challenges. The pain points that have delayed adoption include costly gas fees, a complicated onboarding process, and unnecessary repetition and obstacles for developers looking to create new DApps and companion products.
Related: Where does the future of DeFi belong: Ethereum or Bitcoin? Experts answer
As a result, blockchains like Binance Smart Chain, Solana, Cosmos, and Layer 2 solutions like Polygon have emerged lately, which are quickly catching up and solving some of the problems that come with building on Ethereum. Contrary to popular rhetoric, these solutions are not implemented to “kill Ethereum” but to provide a multi-chain approach to building Web 3.0. The number of blockchains and blockchain projects created on a daily basis increases as developers try to leverage the capabilities of the technology. The increase comes as a tacit acknowledgment that no perfect solution will be able to meet all of the blockchain requirements at the same time.
Related: Is a new decentralized Internet or Web 3.0 possible?
In a multi-chain world, we have the ability to enable and link new chains together to improve the overall user experience rather than competing. The prospect of a multichain ecosystem would allow anyone to build anywhere. It depends on cross-chain solutions, some of which are already in production. Compatibility solutions for Ethereum virtual machines are also becoming fundamental pillars of the ecosystem. These solutions allow different blockchains to communicate with each other without the help of intermediaries and mimic the way the internet works today.
Learn from the evolution of the internet
Like the previous Internet, which was once incoherent with its own scaling problems, blockchain technology must transition from its current state – chains operating in isolation – to a networked ecosystem. This allows new and inexperienced users to take full advantage of ledger technology. The aim is to build for commercial use.
Related: Is crypto approaching its “Netscape moment”?
Today, DApps are complicated and expensive, just as the World Wide Web was once described as “slow” and “raw”. Instead of the fluid experience one would experience using modern websites and apps like YouTube or Instagram, the blockchain experience is defined and lived by every moving part. This leads to a fragmentation of actions that should be seamless. Multichain technologies will shift that experience from complicated chain movements to uninterrupted activities where the end user does not know which chain they are working on.
Right now we can only imagine what this might look like, but we know it could revolutionize the way we use blockchain technology. Take, for example, the implementation of blockchain in the traditional financial sector. The lack of interoperability would make the interactions between banks that use different blockchains too complex and interrupt all communication between customers who do banking with different blockchains. If these blockchains were interoperable, the transfer of data from one to the other would not only be possible, but also more secure and faster.
If the past is an indication of what the future will bring, the natural evolution of Web 3.0 will be the ultimate link for chain communication and data sharing. Where Web 2.0 made the Internet more interactive, Web 3.0 will make the Web simpler, more integrative and more semantic.
A future with multiple chains
Dealing with the existing blockchain complexity will be absolutely critical in transforming the blockchain into a high-growth industry.
Think of large Layer-One blockchains like Ethereum as a city. They are congested and more expensive, but you get certain benefits. Layer 2 blockchains and sidechains, on the other hand, are more like the suburbs. They are less congested and may offer less security. If there was a convenient means of rapid transportation between these communities, users could enjoy the best of all worlds.
To prepare for the mass adoption of Web 3.0, which will see an influx of over a billion users, we must be ready to take a multichain approach that eliminates complex transactions and ensures a smooth end-user experience.
This article does not provide investment advice or recommendations. Every step of investing and trading involves risk, and readers should do their own research when making a decision.
The views, thoughts, and opinions expressed herein are those of the author alone and do not necessarily reflect the views and opinions of Cointelegraph.
Ahmed Al-Balaghi is CEO and co-founder of Biconomy. Prior to that, Ahmed worked for Jabbar Internet Group, a Dubai-based venture capital company. He also founded Encrypted, the largest podcast in MENA devoted to fintech, blockchain and crypto assets. Ahmed previously worked as a blockchain researcher in Shanghai, China. He has also worked for institutions such as Citibank, Dow Jones and Ofgem.