Chain link (CRYPTO:LINK) plays a unique role in the crypto space. In this segment of “The Crypto Show” on Motley Fool Live, recorded on February 23, Fool.com contributors Jon Quast and Travis Hoium discuss the promising blockchain network project that is attracting investor interest.
Jon Quast: First, let’s talk about Chainlink. Have you ever heard of Chainlink, Travis?
Travis Houm: It is one of those that pops up from time to time in crypto trading. But I didn’t dig deep into what they do until recently. They play a really interesting role in the crypto ecosystem and more specifically NFT.
Quest: Yes I agree. The interesting thing for me when you think about cryptocurrency or blockchains I guess I should say, in real world utility the thing that always bugs me a bit is that blockchains are digital and that the real world is not. It almost seems like every application of the technology always supports another blockchain or cryptocurrency. It still exists inside that space and I would always want to see how it solves a problem outside of that space.
The Chainlink here, it’s interesting what they’re trying to do, bridge that gap between traditional tech software and blockchain. It’s different languages. Different, I don’t know how you want to talk about it, they are software languages and Chainlink can talk about both. This is the case for that. Geez, some big players who really like the promise of Chainlink, including one of the co-founders of DocuSign (NASDAQ: DOCU), it is a partner. I was reading that too Amazon (NASDAQ:AMZN) and Google [part of Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL)] are also partners in this project. It is a very promising project from this point of view.
Hoium: Yes and you have the random number generator on your second chip there but that seems like something if you can verify the numbers are random in the blockchain then by that 3rd party there is value to this if you’re trying to do something to maintain an NFT.
So something like the Bored Apes I guess used Chainlink to verify that their mint was actually random and they didn’t give you a very good NFT and a bad me just because they like you better . There are some great apps like that, maybe it’s something we need on a daily basis, but if you’re running an NFT project, if you’re Amazon, if you’re Google looking for blockchain and verifiable random numbers, which can be really valuable.
Quest: Absoutely. In your opinion, that’s the risk without a system like this. You could run an NFT project, for example, like the Bored Apes and you know who all your friends are, you know where all your friends’ wallets are. From the outside it looks like they played by the rules like everyone else, in reality you went ahead and awarded them the most valuable of the whole project. Who is the wisest ? Who can really say that this is not what happens with something that is Chainlink’s verifiable random function, for example, it is a way to overcome this.
The problem is that version 1 of this had high fees associated with it and NFTs have high fees, to begin with, and they pay high fees on top of that for the chain link, that’s the knock against. This version 2 was actually released last Wednesday. I don’t know if it was announced before our show last Wednesday or not. But in any case, they just announced that version 2 is launched and that it reduces these costs by up to 60% while maintaining the initial objective. They are still assigning these random numbers.
Hoium: Yeah. We’re going to look into the technology and I think blockchains, in general, are driving costs down, while utility is going up. That’s going to be the theme of this show, at least from my perspective, how useful is that in the real world, in digital applications. It is Chainlink that has just taken another step in this direction.
Quest: Yeah, it’s so good. The argument against so many of these projects is the high fees. It’s true right now, it’s a problem that’s being fixed, we’re working on it and as you can see on Chainlink, it’s Chainlink, it’s getting better over time. If you follow Chainlink, if you own Chainlink, I think that’s fine. I think it increases the potential for your adoption. If you can provide the same function for 60% less, that’s a win for me.
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