Blockchain technology promises a future of seamless digital transactions, but the current reality is fraught with complexity and interoperability issues. To shed light on these challenges, roundtable moderator Rob Nelson had an inspiring conversation with Simon Baksys, VP of Business Development at LayerZero Labs.
Nelson began the discussion by comparing everyday digital transactions to blockchain interactions. He emphasized that users are often unaware of the underlying mechanisms that power their online purchases. This lack of visibility is convenient in traditional e-commerce, but raises questions when applied to blockchain technology.
Baksys responded by highlighting the similarity between cloud providers and blockchain networks. He said that unless a major outage occurs, users rarely care whether a service is hosted on AWS, GCP, or Azure. This indifference extends to blockchain, where users want seamless value from applications without needing to understand the technical details.
However, Baksys noted that blockchain’s decentralized ethos brings unique challenges. He explained that power users who are actively involved in different networks frequently encounter issues such as transferring stablecoin holdings between blockchains. For example, moving USDC from Solana to eEthereum could expose interoperability issues that regular users may not face.
Lack of interoperability could lead to stagnation in the blockchain ecosystem, Baksis warned. He likened this to the inefficiencies of the current financial system, where intermediate processes and manual intervention mean wire transfers take days. Without addressing interoperability, blockchain technology risks replicating these outdated issues in the new financial environment.
Baksys’ insights highlight the importance of seamless interoperability to realise blockchain’s full potential. As blockchain continues to evolve, ensuring different networks can communicate and transact smoothly will be crucial to avoiding the pitfalls of the past and paving the way for a more efficient, transparent future.
