Cross-chain, side-chain Multi-chain. What's the difference

These terms are what we see as we go down the rabbit hole in the cryptocurrency ecosystem.

This post is to differentiate between these terms.

To better understand these we need to first understand what interoperability is.

Interoperability

Interoperability in the blockchain is the ability of different networks or blockchains to talk to each other. This allows the users of each blockchain to be able to send data and values across various blockchains.

Interoperability is what is found in the traditional banking system in which you can send your funds across various banks.

Most blockchains are created to be solo, and this limits the user's use of digital assets.

What's Cross-chain

This means that a crypto project exists across different blockchain networks. Cross-chain technology allows interoperability among blockchains, In other words, it acts as a bridge between blockchains.

Imagine you want to interact with a DeFi protocol on polygon and you have Bitcoins you know automatically that you can not spend or use your bitcoin on the polygon network, to use the bitcoins you need to swap them to Matic which will be costly, inconvenience and time-consuming.

That's where a blockchain bridge comes into place, it eliminates the need for an exchange and also gives the individuals more control as they navigate within the crypto ecosystems.

What are Side-chains

An independent blockchain network known as a sidechain is linked to a parent blockchain or mainnet via a two-way peg. These independent blockchains have their consensus methods, which help a blockchain network increase privacy and security while reducing the amount of additional trust needed to keep a network running.

The major purpose of a side chain is to improve blockchain scalability.

What are Multi chains

A multi-chain project is an available project across various blockchains. For these to work, the project has to exist in at least two blockchains at the same time. It is possible to use the project across many networks because it exists across multiple blockchains and enables simple communication and interaction between them.

Conclusion

The removal of the barriers between different blockchains will define the future of cryptocurrency – and how far the technology can go.

Now you understand the difference between side-chain, multi-chain and cross-chain