The former Google CEO, Eric Schmidt, says that Chainlink has better technology and scales than other cryptocurrency competitors. This comes when Chainlink is receiving so much hype in the industry.
Every blockchain is a separate universe. There has been a weakness arising from the requirement to trust an outside source from the blockchain to supply the correct information. Why, then, does Eric Schmidt stand by such a statement?
What is Chainlink?
Chainlink is a decentralized blockchain oracle network that allows smart contracts to communicate securely. The communication occurring involves real-world data and services outside of blockchain networks.
But why is Chainlink so important? Chainlink is vital as it significantly enhances smart contract capabilities by allowing access to data outside the blockchain and off-chain computing. Chainlink does all these by keeping blockchain technology’s security and reliability assurances.
Chainlink’s Technology
The technology they incorporate makes Chainlink ideal. Thus, the Cross-Chain Interoperability Protocol (CCIP) is an open-source global standard for decentralized inter-blockchain messaging, data, and token movements. Therefore, Chainlink automation through CCIP brings on low-cost, verifiable off-computation to Dapps to trigger smart contract functions in a highly reliable and decentralized manner.
On the other hand, oracles are essential to a blockchain; they deliver digital sources such as websites, servers, or databases. Software oracles provide real-time info on exchange rates or price fluctuations. Chainlink relies on oracles to gather data from various sources.
Middleware, an oracle software, acts as an intermediary, translating data from the real world to smart congrats on the blockchain and back again. However, it is vital to note that if the oracle is faulty, there would be a problem knowing if the data is accurate.
Lastly, Chainlink offers hybrid smart contracts consisting of a code that runs exclusively on the blockchain and a decentralized oracle network. It is a distributed network of oracle nodes that provide info from off-blockchain data sources to on-blockchain smart contracts.
Smart contracts exist on a blockchain and are immutable and verifiable, guaranteeing a high level of trust among parties.
Potential Competition
The latest major competitor for Chainlink is the open-source platform for oracle services, the Decentralized Information Asset (DIA). The platform is built as DeFi oriented and allows market players to share reliable information. DIA operates as leverage for crypto-economic alternatives and the knowledge from the community to source, validate and deliver trusted financial data.
DIA also funds bounties of data sourcing and validation for rewards. The DIA database gets hashed on-chain and all scrapper code and documentation.
Similarly, Oraichain comes as another competitor, enabling smart contracts to access external AI APIs securely. Artificial Intelligence is a helper as it enhances smart contracts. Oraichain is essential as it is a foundational layer for developing a new generation of smart contracts and dApps.
Key Takeaways
Chainlink’s token, $LINK, is one of the largest cryptocurrencies today, and for a good reason. There are so many applications that use Chainlink every day. This blockchain solution is valuable to the real world, which makes it a stronger contender to outperform in the crypto market.
