(+) What is Eternal Token? XET Enters Top 100 With 646% Weekly Growth
Originally published on: CCN
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September 27, 2018
The blockchain industry is still very much in its early stages, and is seen as “the disruptor” to banks and many other industries. But that doesn’t mean there can’t be disruptors within the industry. Companies that pop up and begin to threaten incumbents in a certain space.
The last few days have shown that exact event occurring with a relative unknown called Chainlink. A few positive announcements have catapulted them up onto the map within the oracle space, and it is unclear where this will take them in the future.
What is a Blockchain Oracle?
Smart contracts are incredibly effective and novel ways of handling automation and decision-making, but they currently live inside the “walled garden” of their own ecosystem. We have discussed companies that connect different blockchains, as well as companies that use blockchain to connect real world assets, but there is also a need to connect data external to the blockchain.
The term oracle comes from Ancient Greek mythology where people didn’t have enough information to make decisions and would go to oracles for additional inputs. This is exactly what “oracles” aim to do. Connecting Dapps and APIs is just the beginning of the power of oracles.
Bitcoin and Ethereum operate in a form of isolation, with no connection to information outside of their respective chains. This makes validating conditions of smart contracts very difficult. Ideally, an oracle would be able to translate outside information into terms that Dapps could understand, thus triggering (or not triggering) the smart contract.
The idea is that much like Coinbase acts as a gateway for a large amount of the funds going into the blockchain ecosystem, one company would likely be able to become the gateway for much of the information flowing into the ecosystem.
Chainlink as a Competitor
Ever since people realized there was massive potential for whoever could figure out how to bring information like price changes, payments, or even something as innocent as temperature into the blockchain, more companies have been working on solving this problem. Oraclize has long been seen as the frontrunner within the industry, with other behemoths like IBM and Microsoft throwing their hats in the ring as well.
Chainlink was late to the game, but has made significant progress in the time they’ve been going after market share. With high profile partnerships including SWIFT payments, IC3, and Gartner, they are hardly an unknown anymore.
Their coin, LINK, is what is used to pay for an Oracle (or a node) to provide data. The services offered include certification, validation, and reputation services, all with the goals o f enforcing the overall integrity of the networks’ Oracles. Historically, Chainlink has been weak on the connection from and aims to let their technology do the talking. Right now, their mainnet is not yet live, and it still isn’t’t clear when it will be released. For this reason, the only way to really judge how they are doing is based on their partnerships and their listings.
Chainlink’s Recent Performance
In the last few weeks, we have seen Chainlink climb up the rankings to enter the top 20 ERC-20 tokens in terms of market capitalization. Up a wild 23.8% in just the last week, this is due to a combination of a few pieces of news. First, Bithumb announced that LINK would be listed on their exchange. Then, Chainlink announced a partnership with Gamedex where they would translate professional sports match results into the Dapp.
These few pieces of information alone don’t mean much, but there is often a momentum play that can be made as a company comes out of obscurity. Being in the top 20 of market capitalizations is a good tell.
Featured image courtesy of Shutterstock.