Smart contracts have been an interesting and useful development in the blockchain industry They have been recognized for their ability to automate the contracting process, for transferring value between users based upon the conditions they agree upon, and perhaps most importantly, they are secure and may not need enforcement by a third-party.
Of course, smart contracts are not completely disconnected from the real world. In fact, there still are outstanding issues concerning accessing external events for verification, they need access to information that is not available on the blockchain, and they require connection to the off-chain data. This entire process, where external events are verified by connecting to outside sources, is called “oracles.” One of the most popular oracle is ChainLink for its ability to use networks of other decentralized and independent oracles, and the data that it obtains is extremely accurate.
Chainlink has been able to raise $32 million in 2017 through its ICO and interestingly enough, it is a pretty private startup as well. Sergey Nazarov has been tracked down by Decrypt, though, at an Ethereum Community Conference. There, Decrypt discussed with Nazarov the platform’s projects.
Apparently, the platform has been working on developing partnerships and the latest is with Provable, an oracle service. Nazarov also stated that
“Essentially, our goal is to make good blockchain middleware. It’s not the sexiest way to put it, but what we’re doing is connecting systems that need to be connected to value to exist.”
Essentially, its approach is to ensure that externally connected smart contracts are as secure and reliable as the token-based contracts.
The platform functions in a decentralized manner and it can use decentralized and permissioned blockchains. A few of its main partners include SWIFT, Web3Foundation, Polkadot, and Zeppelin. The task it has, which is to connect blockchain technology to the real world, is not easy though. Nazarov mentioned that smart contracts are secure within themselves, but connecting them to an external source also requires security.
Verification of real-world events can be dealt with in a number of ways. One option is by decentralization. Chainlink verifies input sources with multiple oracles. A second option is “trusted-execution environments,” which the platform is still working on. These environments are secure and are located within processors where code data is protected. Chainlink uses special hardware that it has acquired, which was developed by Ari Juels at Cornell University. The technology, called Town Crier, has been described as a “high-trust bridge” between online data sources and the ethereum blockchain. The technology uses secure enclaves to protect the system from attacks and to maintain confidentiality during the smart contract process and receiving data from external sources.
According to Nazarov,
“A lot of the time people think these two approaches are mutually exclusive, but they’re not. Our development priorities are tied to what people want to consume. Right now, it’s more about decentralization because trusted environments are an early technology. Trusted execution environments are a good feature for the future.”