The Difference Between Crosschain And Multichain

If you learn about cryptocurrency projects, you will probably often come across the terms Multi-chain, Cross-Chain. In this article, we will dive into what Multichain is, and the difference between Multi-chain and Cross-Chain.

What is Multi-chain?

Over the past few years, we have seen many significant changes in this vast blockchain sector. If before, there were only a few popular blockchains of Bitcoin, Ethereum or Cardano, etc., Now things are different! A series of new blockchains have been launched, and are expected to generate more than $176 billion in business value by 2025, ho, and possibly $3.1 trillion by 2030.

More and more Governments, businesses, and individuals are gradually paying attention to Blockchain Technology. Increasing the number of people interested in using blockchain networks is a good thing, but it also has many limitations, which are:

Users increased, outpacing the technology's capacity, leading to network congestion and higher transaction fees.

The nature of blockchains that work individually, and lack of connection, so it is difficult for two users of two blockchains to transact with each other is also a big problem.

Multi-chain is a term that means "multi-chain, cross-platform". That is, if a project is labeled multi-chain, it means that it is being deployed on many different blockchains (at least 2). For example, a project can be deployed if a certain project is concurrently on blockchains such as Ethereum, Binance Smart Chain, Solana, Polkadot, Avalanche, or other blockchains.

In the current context, for example, the same field is AMM DEX, on each platform, there are extremely prominent names, on Ethereum, there is Uniswap, on Binance Smart Chain there is PancakeSwap, on Polygon there is Quick swap.

More and more Governments, businesses, and individuals are gradually paying attention to Blockchain Technology | Image Source: Internet 

However, each project is operating very independently and has not yet reached a large number of users from other ecosystems. But what if projects will implement Multi-chain? When implementing the Multi-chain mechanism, not only users but the project team will also enjoy the following benefits:

For users

• Easily use products and services on different blockchain networks
• No longer being tied to using services on a single ecosystem.
• Users will also have more diverse options, able to access services that their familiar ecosystem has not yet implemented.

For project team

• By applying the multi-chain model, the project will reach more customers in different ecosystems, which help expand the scope of the project's activities.
• Launching a multi-chain project will overcome bottlenecks and slow speeds in the main chain; taking advantage of the fast speed and low cost of other chains to provide a better user experience.
• Risk reduction: In case the main chain has problems, the project itself will not be much affected

However, implementing multi-chain will also face many challenges. Each blockchain has its characteristics, structure, programming language, and set of supporting tools. Therefore, if you want to deploy to a new blockchain, you will need to take deep research on new chains.

In addition, the security issue of Multi-chain is still controversial when many Multi-chain projects are currently not secure enough.

Users and Project teams will enjoy Multichain benefits | Image Source: Internet 

What is cross-chain?

Cross-chain is a commonly used term with the meaning of a solution to help transfer electronic assets from one blockchain to another.

The reason Cross-chain was born is because of the differences of each blockchain network, so the operations to transfer assets between blockchains are limited. Most efficiently, Cross-chain is like a bank and the mechanism is similar, we will change Yen into Vietnamese currency to use.

For Blockchain technology, we will wrap the tokens in its network to the token on the other lower network that you want. Thanks to Cross-chain, the DeFi array has created an application that is considered the most important for DeFi.

Cross-chain is divided into two types:

• Isomorphic Cross Chain: The features of Isomorphic Cross Chain include security mechanisms, block generation logic, consensus algorithms, and networking making them relatively unified and interoperability quite simple.
• Heterogeneous Cross Chain: Unlike Isomorphic Cross Chain, Heterogeneous Cross Chain interacts quite complexly between chains and especially uses PoW algorithm (Common in PBFT consensus). Cross-chain design is difficult due to the different guarantee mechanisms and block composition. Often 3rd parties will back up when interactions between chains are not consistent.

Advantages of Crosschain

• Increased interoperability: Thanks to Cross-chain, blockchains can link and communicate with each other, so that it could bring an optimal experience for users.
• Efficiency: Thanks to Cross-chain, liquidity is created and moves more strongly in Blockchains.
• Practical application: In Blockchains, the exchange of tokens will be faster and simpler.

Because it is a nascent technology, the application of Cross-chain has only been exploited at the level of exchanging tokens. Therefore, this is also an opportunity for Cross-chain to develop in the future when Blockchains are operating independently and there are no bridges.

Cross-chain is a commonly used term with the meaning of a solution to help transfer electronic assets | Image Source: Internet

Compare Crosschain with Multichain

Multi-chain refers to a project that works on many different chains. When project A deploys Multichain, it means that "A" can independently deploy on another chain such as BSC or Polkadot.

But to be able to move assets between independent chains, you will need the Cross-chain tool. It is a tool that helps people transfer assets.

To avoid confusion between Multi-chain and Cross-chain, remember that:

• Multi-chain: Like a multinational company with many headquarters located in many different countries.
• Cross-chain: Like a company that transports goods from one country to another.