Chainlink (CRYPTO:LINK) is playing a unique role in the crypto space. In this segment from “The Crypto Show” on Motley Fool Live, recorded on Feb. 23, Fool.com contributors Jon Quast and Travis Hoium chat about the blockchain network’s promising project that’s gaining interest from investors.
Jon Quast: First up, let’s talk about Chainlink. Have you heard about Chainlink before, Travis?
Travis Hoium: This is one of those that pops up every once in a while in crypto trading. But I have not dug deep into what they’re doing until recently. They play a really interesting role in the crypto and specifically NFT ecosystem.
Quast: Yeah, I agree. The interesting thing to me when you think about cryptocurrency or blockchains, I guess I should say, in real-world utility, the thing that always trips me up a little bit is blockchains are digital and the real-world isn’t. It almost seems like every single application for the technology is always in support of some other blockchain or cryptocurrency. It’s always existing inside of that space and I will always want to see how is it solving a problem outside of that space.
The Chainlink here it’s interesting what they’re trying to do, bridging that gap between traditional technology software and blockchain. It’s different languages. Different, I don’t know how you want to talk about it, it’s software languages and Chainlink can speak both. That’s the case for it. Definitely, some big players who really like the promise of Chainlink, including one of the co-founders of DocuSign (NASDAQ:DOCU), he’s a partner. I was also reading that Amazon (NASDAQ:AMZN) and Google [part of Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL)] are also partners in this project. It’s a very promising project from that perspective.
Hoium: Yeah, and you’ve got the random number generator on your second bullet there, but that seems to be something that if you can verify that the numbers are random in the blockchain, then by this third-party, there’s value in that if you’re trying to do something maintain an NFT.
So, something like the Bored Apes, I guess, used Chainlink to verify that their mint was actually random and that they didn’t assign a really good NFT to you and a bad one to me just because they like you better kind of thing. There are interesting applications like that, that maybe this is something that we need on a day-to-day basis, but if you’re running an NFT project, if you’re Amazon, if you’re Google looking for blockchain and verifiable random numbers, that can be really valuable.
Quast: Absolutely. To your point, that is the risk without a system like this. You could be running an NFT project, for example, like the Bored Apes and you know who all your friends are, you know where all the friends’ wallets are. From the outside, it looks like they played by the rules just like everybody else, in reality, you went ahead and assigned them the most valuable of the entire project. Who is the wiser? Who’s to actually say that that’s not what’s going on with something that is Chainlink’s verifiable random function, for example, that is a way to overcome that.
The problem is that the version 1 of this had high fees associated and NFTs have high fees, to begin with, and they’re paying a high fee on top of that for chain link, it’s the knock against it. This version 2 actually came out last Wednesday. I’m not sure if it was announced before our show last Wednesday or not. But either way, they just announced that version 2 is launching and it reduces these fees up to 60% while maintaining the original purpose. They are still assigning those random numbers.
Hoium: Yeah. We’re going to see in technology and I think blockchains, in general, is costs coming down, utility going up. This is going to be the theme on this show, at least from my perspective, is what is the utility that’s coming out of this in the real world, in digital applications. This is Chainlink just taking another step in that direction.
Quast: Yeah, that’s so good. The argument against so many of these projects is the high fees. That is true right now, it’s a problem that’s being solved, it’s being worked on and as we can see from Chainlink, it is Chainlink, it is getting better over time. If you are following Chainlink, if you own Chainlink, I think this is good. I think that this boosts the potential for your adoption. If you can provide the same function for 60% cheaper, to me that’s a win.
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