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Crypto Terms:  Letter C

What is Cross-Chain Communication?

Meaning:
Cross-Chain Communication - The movement of data between one or more blockchains is referred to as cross-chain communications.
medium
3 minutes

Let's find out Cross-Chain Communication meaning, definition in crypto, what is Cross-Chain Communication, and all other detailed facts.

The widespread usage of blockchain platforms has brought to light difficulties with processing performance and scalability in the earlier blockchains. Because all blockchains run separately and do not connect with one another, developers have a unique difficulty. This is because consumers are unable to see the full potential of blockchain technology and its advantages.

Because blockchain projects have widely varied architectures, in the end, it may be hard to transmit data between chains without the need for extra software or third-party involvement. 

This is why cross-chain communication solutions are becoming more popular. There are now numerous cross-chain communication protocols in place for blockchains to share information.

Interoperability is a big concern for blockchain developers because it is one of the elements that is mostly lacking in existing blockchain structures. While blockchain bridges are one method of ensuring interoperability, cross-chain communication technologies can aid in the development of more efficient environments.

However, at the moment, blockchains are unable to operate to their full potential due to a lack of cross-chain communication between different systems. 

As the processes evolve, more applications and solutions become available to blockchain developers. Cryptocurrency users will get advantages from faster transaction computational power and quick trades between different assets. Cross-chain communication still has a long way to go, but there has been a significant advancement in this area of blockchain technology.

One of the most popular cross-chain communication devices at the moment is Atomic swaps. Atomic swaps enable the possibility for peers to transfer tokens from one wallet to another by using a smart contract. This prevents the need to buy cryptocurrency from an exchange.

This technique disables the need for a third-party exchange and lets peers directly swap cryptocurrency.

Another blockchain cross-chain communication example is the Stateless Simplified Payment Verification (SVP). This technology enables blockchains to evaluate the authenticity of transactions without preserving complete transaction details. Therefore, this approach allows blockchains to interact without needing to exchange large volumes of data.

Merged consensus connections, relays, and chain federations are some more cross-chain communication tools. All of these communication techniques entail varying degrees of monetary investment. 

The ideal solution for cross-chain communication is generally defined by the fundamental properties of the two blockchains included. The lightning network, for example, is based only on the notion of atomic exchanges. 

Nevertheless, due to the highly variable structure of blockchain-based systems, Atomic swaps are not always the ideal option for ensuring cross-chain communication.

intermediaries in the process. Rather than relying on banks, <strong>mutual funds<\/strong>, or business angels, entities raising the funds can collect money through so-called crowds.<\/p>\n<p>Many crowdfunding campaigns offer rewards for donations. Crowdfunders can receive benefits like VIP access, <strong>insider looks into the projects<\/strong>, physical gifts, and others based on their donation amount and the conditions established in the crowdfunding campaign. The reward acts as compensation for taking the financial risk of investing in the project.<\/p>\n<p>There are two general types of crowdfunding campaigns &ndash; <strong>investment crowdfunding<\/strong> and non-investment crowdfunding. It distinguishes between funders who serve as investors in the project aiming to receive economic returns and funders who support the campaign <strong>without a financial incentive<\/strong> as a reward.<\/p>\n<p>There are different models for categorizing crowdfunding campaigns. The investment model can proceed as either debt-based crowdfunding or equity-based crowdfunding. Non-investment models can be <strong>reward-based<\/strong> or donation-based crowdfunding campaigns.<\/p>\n<p>Many campaign funders come from the financial sector, particularly financial technology (FinTech). The use of online crowdfunding platforms can help maintain contact between those seeking funding and potential investors. Crowdfunding campaigns can also promote open calls for financial participation and cooperation.<\/p>","definition":"a method of raising money via fundraisers on different online platforms.","status":"published","meta_title":"What is Crowdfunding? Definition & Meaning | Crypto Wiki","meta_description":"Crowdfunding meaning: Crowdfunding - a method of raising money via fundraisers on different online platforms.","meta_keywords":null}" :prev-section="{"id":211,"wikipedia_url":"https:\/\/en.wikipedia.org\/wiki\/Blockchain","level":"easy","author_id":1,"created_at":"2023-06-19T06:58:59.000000Z","updated_at":"2024-01-07T08:18:56.000000Z","slug":"what-is-cross-chain","title":"What is Cross-Chain?","section":"C","keyword":"Cross-Chain","content":"<p><strong>Cross-chain<\/strong> is a type of technology developed to enhance the interconnectivity between different <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-blockchain/">blockchain systems. The implementation of cross-chains allows information and value exchange and creates a unique interconnected blockchain ecosystem.<\/p>\n<p>Cross-chains are independent of the connected platforms and aim to <strong>enable seamless interaction<\/strong> between users from different blockchains. Cross-chain technology can eliminate the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-intermediary-middleman/">middleman between decentralized networks and allow values to be transferred directly.<\/p>\n<p>Some of the best-known cross-chain projects are Blocknet, Cosmos, Wanchain, and Polkadot, to name a few. All cross-chains enhance different aspects of interconnection. Blocknet aims to improve <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-decentralized-exchange-dex/">decentralized exchange (DEX)<\/strong><\/a> operations between blockchains, while <strong>Polkadot&rsquo;s<\/strong> focus is on <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-smart-contract/">smart contract<\/strong><\/a> data sharing across distributed platforms.<\/p>\n<p>Wanchain provides interoperability for <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-defi/">decentralized finance (DeFi)<\/strong><\/a> applications. Cosmos employs the central Hub protocol to support blockchain networks via zones.<\/p>\n<p>DeFi and healthcare are among two of the biggest fields employing cross-chain technology. <strong>DeFi<\/strong> relies on cross-chain functionality for <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-token-swap/">token swapping<\/strong><\/a> between blockchain networks. <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-interoperability/">Interoperability powered by cross-chain technology is a necessary factor to allow <strong>financial ecosystems in the DeFi space to grow and succeed<\/strong>.<\/p>\n<p>Users can employ cross-chain technology to utilize different <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-consensus/">consensus mechanisms<\/strong><\/a>, like <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-mining/">mining and <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-staking/">staking, between blockchain networks, thus <strong>reaping more benefits and potentially increasing their profits<\/strong>.<\/p>\n<p>The healthcare sector utilized cross-chain functionality to enhance <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-encryption/">encryption security, and promote efficiency, transparency, and <strong>data ownership<\/strong>.<\/p>","definition":"technology that enables interconnectivity between two different blockchain systems.","status":"published","meta_title":"What is Cross-Chain? Definition & Meaning | Crypto Wiki","meta_description":"Cross-Chain meaning: Cross-Chain - technology that enables interconnectivity between two different blockchain systems.","meta_keywords":null}" :model="{"id":207,"wikipedia_url":"https:\/\/en.wikipedia.org\/wiki\/Blockchain","level":"medium","author_id":1,"created_at":"2023-06-19T06:58:59.000000Z","updated_at":"2024-01-07T08:13:46.000000Z","slug":"what-is-cross-chain-communication","title":"What is Cross-Chain Communication?","section":"C","keyword":"Cross-Chain Communication","content":"<p>The widespread usage of blockchain platforms has brought to light difficulties with processing performance and <strong>scalability<\/strong> in the earlier blockchains. Because all blockchains run separately and do not connect with one another, developers have a unique difficulty. This is because consumers are unable to see the full potential of blockchain technology and its advantages.<\/p>\n<p>Because blockchain projects have widely varied architectures, in the end, it may be hard to transmit data between chains without the need for extra software or third-party involvement.&nbsp;<\/p>\n<p>This is why cross-chain communication solutions are becoming more popular. There are now numerous cross-chain communication protocols in place for blockchains to share information.<\/p>\n<p>Interoperability is a big concern for blockchain developers because it is one of the elements that is mostly lacking in existing blockchain structures. While blockchain bridges are one method of ensuring interoperability, cross-chain communication technologies can aid in the development of more efficient environments.<\/p>\n<p>However, at the moment, blockchains are unable to operate to their full potential due to a lack of cross-chain communication between different systems.&nbsp;<\/p>\n<p>As the processes evolve, more applications and solutions become available to blockchain developers. Cryptocurrency users will get advantages from faster transaction computational power and quick trades between different assets.<strong> Cross-chain communication still has a long way to go, but there has been a significant advancement in this area of blockchain technology.<\/strong><\/p>\n<p>One of the most popular cross-chain communication devices at the moment is <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-atomic-swap/">Atomic swaps<\/strong><\/a>. Atomic swaps enable the possibility for peers to transfer tokens from one <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-wallet/">wallet to another by using a <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-smart-contract/">smart contract<\/strong><\/a>. This prevents the need to buy cryptocurrency from an exchange.<\/p>\n<p>This technique disables the need for a third-party exchange and lets peers directly swap cryptocurrency.<\/p>\n<p>Another blockchain cross-chain communication example is <strong>the Stateless Simplified Payment Verification (SVP).<\/strong> This technology enables blockchains to evaluate the authenticity of transactions without preserving complete transaction details. Therefore, this approach allows blockchains to interact without needing to exchange large volumes of data.<\/p>\n<p>Merged consensus connections, relays, and chain federations are some more cross-chain communication tools. All of these communication techniques entail varying degrees of monetary investment.&nbsp;<\/p>\n<p>The ideal solution for cross-chain communication is generally defined by the fundamental properties of the two blockchains included. The lightning network, for example, is based only on the notion of atomic exchanges.&nbsp;<\/p>\n<p>Nevertheless, due to the highly variable structure of blockchain-based systems, Atomic swaps are not always the ideal option for ensuring cross-chain communication.<\/p>","definition":"The movement of data between one or more blockchains is referred to as cross-chain communications.","status":"published","meta_title":"What is Cross-Chain Communication? 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He&rsquo;s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.<\/p>\n<p>Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain &amp; Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.<\/p>\n<p>Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.<\/p>","user":{"id":1,"first_name":"Aaron","last_name":"S.","email":"aaron@bitdegree.org","email_sanitized":"aaron@bitdegree.org","email_verified_at":"2023-12-01T09:40:20.000000Z","must_verify_email":false,"is_registered_with_wallet":false,"status":"active","country":"LT","last_connected_ip":"88.119.132.125","image_id":2641,"referral_token":"05TMu2NysXOCn525","referred_by":null,"created_at":"2023-05-03T14:30:55.000000Z","updated_at":"2024-01-09T15:22:21.000000Z","full_name":"Aaron S."}}}" :chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? 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Trailblazer","status":"published","modified_content":null},{"chapter_id":2,"order":16,"slug":"what-is-algorand-crypto","title":"Did Algorand Truly Solve the Blockchain Trilemma?","status":"published","modified_content":null},{"chapter_id":2,"order":17,"slug":"what-is-olympus-dao","title":"Does Olympus DAO Have Anything to Do With Mythology?","status":"published","modified_content":null},{"chapter_id":2,"order":18,"slug":"what-is-avax","title":"Is Avalanche Network (AVAX) Rightfully Called the Future of DeFi?","status":"published","modified_content":null},{"chapter_id":2,"order":19,"slug":"what-is-monero-coin","title":"Monero: Where Cryptocurrency Meets Cryptography","status":"published","modified_content":null},{"chapter_id":2,"order":20,"slug":"what-is-ripple-xrp","title":"Is Ripple \"it\" When it Comes to Cross-Border Transactions?","status":"published","modified_content":null},{"chapter_id":2,"order":21,"slug":"practical-use-of-cryptocurrencies","title":"The Practical Use of 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Wallet?","status":"published","modified_content":null},{"chapter_id":4,"order":2,"slug":"hot-wallet-vs-cold-wallet","title":"Hot Wallet VS Cold Wallet: Which One to Pick?","status":"published","modified_content":null},{"chapter_id":4,"order":3,"slug":"non-custodial-wallet","title":"What are Non-Custodial Crypto Wallets?","status":"published","modified_content":null},{"chapter_id":4,"order":4,"slug":"what-is-metamask","title":"Metamask: The Leading Non-Custodial Wallet","status":"published","modified_content":null},{"chapter_id":4,"order":37,"slug":"how-safe-is-cryptocurrency","title":"The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?","status":"published","modified_content":null}]},{"id":5,"title":"NFTs","slug":"nfts","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-nfts.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/nfts-101.jpg","rating":100,"sections":[{"chapter_id":5,"order":2,"slug":"how-to-trade-nfts","title":"NFT Trading: The Ins and Outs","status":"published","modified_content":null},{"chapter_id":5,"order":3,"slug":"buying-nft","title":"Tips and Tricks of Choosing the Right NFTs","status":"published","modified_content":null},{"chapter_id":5,"order":4,"slug":"how-to-store-nft","title":"How to Store NFTs: Best Practices","status":"published","modified_content":null},{"chapter_id":5,"order":5,"slug":"how-to-create-an-nft","title":"How to Create Your Own NFTs?","status":"published","modified_content":null},{"chapter_id":5,"order":6,"slug":"how-to-make-passive-money-with-nft","title":"Making Passive Money with NFTs","status":"published","modified_content":null}]},{"id":6,"title":"dApps & Defi","slug":"dapps-and-defi","updated":true,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-dapps.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/dapps-defi-101.jpg","rating":80,"sections":[{"chapter_id":6,"order":1,"slug":"what-are-nfts","title":"What are Non-Fungible Tokens (NFTs)?","status":"published","modified_content":null},{"chapter_id":6,"order":1,"slug":"what-is-defi","title":"What is Decentralized Finance (DeFi)?","status":"published","modified_content":null},{"chapter_id":6,"order":2,"slug":"what-is-defi-2-0","title":"DeFi 2.0: The New Version of Decentralized Finance","status":"published","modified_content":null},{"chapter_id":6,"order":3,"slug":"what-are-dapps-in-crypto","title":"What Are dApps and How Do They Work?","status":"published","modified_content":null},{"chapter_id":6,"order":4,"slug":"defi-dapps","title":"Picking the Right dApps: Dos and Don'ts","status":"published","modified_content":null},{"chapter_id":6,"order":5,"slug":"what-is-web-3-0","title":"Web 3.0: The Future of the Internet","status":"published","modified_content":null},{"chapter_id":6,"order":6,"slug":"what-are-smart-contracts","title":"What is the Core Purpose of Smart Contracts?","status":"published","modified_content":null},{"chapter_id":6,"order":7,"slug":"what-is-a-dao-in-crypto","title":"The Notion of a Decentralized Autonomous Ogranization (DAO)","status":"published","modified_content":null},{"chapter_id":6,"order":8,"slug":"what-is-staking-in-crypto","title":"What is the Goal of Staking Crypto Assets?","status":"published","modified_content":null},{"chapter_id":6,"order":9,"slug":"what-is-liquidity-pool-in-crypto","title":"What is a Liquidity Pool and How Does It Work?","status":"published","modified_content":null},{"chapter_id":6,"order":10,"slug":"what-is-automated-market-maker","title":"Automated Market Maker: the Cornerstone of the Decentralized Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":6,"order":11,"slug":"what-is-yield-farming-in-crypto","title":"The Main Yield Farming 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Cryptocurrencies?","status":"published","modified_content":null},{"chapter_id":7,"order":2,"slug":"how-to-invest-in-crypto","title":"Investing in Crypto: What Investing Options Do You Have?","status":"published","modified_content":null},{"chapter_id":7,"order":3,"slug":"ico-vs-ido","title":"ICO vs IDO vs IEO: Which One is the One?","status":"published","modified_content":null},{"chapter_id":7,"order":4,"slug":"what-is-an-airdrop","title":"What are Crypto Airdrops and How to Get Them?","status":"published","modified_content":null},{"chapter_id":7,"order":5,"slug":"how-to-get-free-crypto","title":"How to Get Free Crypto Assets?","status":"published","modified_content":null},{"chapter_id":7,"order":6,"slug":"how-to-arbitrage-crypto","title":"What is Crypto Arbitrage: The Main Principles","status":"published","modified_content":null},{"chapter_id":7,"order":7,"slug":"what-is-a-perpetual-contract","title":"Perpetual Contracts: Futures Contracts Without an Expiration 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Mining?","status":"published","modified_content":null},{"chapter_id":9,"order":3,"slug":"what-is-staking-crypto","title":"An Advanced Look into What is Staking Crypto","status":"published","modified_content":null},{"chapter_id":9,"order":4,"slug":"what-is-proof-of-stake-vs-proof-of-work","title":"Proof-of-Work VS Proof-of-Stake: The Differences That Matter","status":"published","modified_content":null},{"chapter_id":9,"order":5,"slug":"what-is-crypto-mining-rig","title":"Crypto Mining Rig: What It is and How to Build One?","status":"published","modified_content":null}]},{"id":10,"title":"Crypto Terms","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/crypto-101-glossary.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-glossary-101.jpg","rating":100,"sections":["A","B","C","D","E","F","G","H","I","J","K","L","M","N","O","P","Q","R","S","T","U","V","W","X","Y","Z"]}]" current-chapter="C" current-section="what-is-cross-chain-communication">