Cryptocurrency interoperability is about paying for purchases in cryptocurrencies. Despite the pandemic and the evolving crypto crimes, advanced interoperability is necessary to protect each side. Thanks to secure interoperability, cardholders can make payments anywhere in the world without worrying about device compatibility and currency conversion.
What is crypto interoperability?
Any crypto wallet owner would like to have a guarantee for payments in any cryptocurrency. Ethereum and altcoins are still an issue of payment since almost every restaurant or shop accepts Bitcoins only.
In this case, interoperability is helpful if the client’s blockchain wallet and the restaurant terminal are compatible with the type of the altcoin in your crypto wallet is irrelevant. Just scan the QR code, and the system converts the currency into the one accepted.
You guessed right - buying with ETH in stores that accept BTC is possible only if their blockchain systems are cross-chain interoperable. Many experts say that after 11 years of cryptocurrency, this should not be a problem. Each type of blockchain was built, for the decentralized system, as a separate independent ecosystem. The ugly truth is that the developers are preoccupied more with competing with each other rather than working on things like compatibility.
This year the pandemic positively influenced the popularity of decentralized finance. Now, the issue of cryptocurrency compatibility is getting the needed attention. DeFi industry, conceived as a single financial ecosystem, and its products could be compatible with each other. According to Jonathan Schemoul, the founder of Aleph.im, told Cointelegraph: “Smart contracts are composable from small building blocks that can be combined to abstract away complexity and deliver a smoother experience to the customer.”
Now, DeFi is a market that has a volume of locked funds of over $10 billion. It’s like honey for the bees for the banking services’ users due to attractive rates for loans and deposits offered by DeFi products. Recently, the attempt of DeFi developers was successful in partially solving the compatibility problem. This way, users can exchange different tokens or refinance a loan from one asset to another.
Despite its grand ambitions, the DeFi sector still has to solve the bank card compatibility. Still, it’s harder to bridge crypto to fiat and even harder to bridge crypto to crypto.
Why bridging fiat to crypto is vital?
In theory, you could pay with Ether in every cafe where only Bitcoin is accepted, but in practice, this is still not common. It’s good to know that, recently, were taken steps to unify the efforts of blockchain systems to make it possible and make interoperability not a problem but a benefit for any cryptocurrency.
The next level of interoperability is the external one. The issue now is to create free space where digital money will be compatible with fiat. Take, for example, Ripple, whose team is currently working on the Interledger Protocol that allows for carrying out transactions between blockchain and non-blockchain platforms.
When do You think will an easy crypto payment be available?