Graph Blockchain’s (GBLC.C) latest deployment of capital to shore up their altcoin reserves has been into Chainlink, and before that, Polkadot, with the intention of staking these coins. But these two coins pose the curious question as to whether or not they truly understand their value.
Picking up these coins—LINK, DOT and ADA before them—are fine for staking. There’s nothing wrong with getting a sizeable share, and hodling them to watch them grow. It’s like buying a cow for milk, but neglecting the opportunities inherent in cheese, breeding and meat. All three of these coins offer much more nuanced alternatives and options for monetary gain in places like smart city construction and decentralized finance that buying them just to stake seems like a wasted opportunity.
“We are very excited to be deploying funds into our third token purchase. We feel strongly that Link will appreciate in value given it has a substantial market cap of over $13-billion (U.S.), a fixed supply and is possibly the most important piece of infrastructure in the blockchain ecosystem. Graph understands first-hand how valuable bridging on-chain and off-chain data sources is to smart contracts and Chainlink is the best solution on the market,” said Paul Haber, Graph’s CEO.
Maybe it will appreciate. In fact, it probably will, given the growth and attention blockchain tech has been enjoying lately, but it just seems like so much money is being left on the table.
Let’s look at Chainlink
Blockchains and smart contracts can only access data that’s already in their ecosystem. A smart contract needs access to information from the outside world relevant to the agreement. Chainlink was built to remedy that situation. It creates oracles, which we can think of as electronic bridges between real world data, and submits this information to smart contracts, which can trigger changes in state on the blockchain based on this access.
The chainlink blockchain’s token is the LINK, which is used to pay for services on Chainlink’s network. It’s built on ethereum, using the ERC20 protocol for token creation. LINK is available for purchase using fiat currency or as part of a shapeshift operation, depending on the exchange.
Oracles come in various types, depending on their application requirements.
- Software Oracles handle information data from online sources. This is your weather forecast, temperature, train delays or flights.
- Hardware Oracles involve getting information directly from the physical world. This is the connection between the IoT censors in the subway, reading the passing train and sending it back to the cloud to be collated, analyzed, stored and regurgitated to platform riders to tell them their train is two minutes late, and indicating where they should stand to optimally board the train.
- Inbound Oracles acquire data from the external world.
- Outbound oracles send data to the outside world. An example of this would be a time sensitive locking mechanism—possibly placed on a delinquent car—which could only be unlocked through payment. The payment appears on the blockchain address and the door unlocks.
- There are also consensus-based oracles which are use to connect prediction markets like augur and gnosis to real world events.
Graph Blockchain had contracts with the city of Seoul, South Korea circa about two years ago to help push along the blockchain angle of their smart city project. At the time, oracles were the stuff of theory. There was no automated toll-bridge between raw real world data and the blockchain’s meant to store information in the system and implement the contracts, which meant the data needed to be manually entered. Now some three years later we have the constructed technological wherewithal to automate a broad variety of processes, which access to LINK could facilitate.
Earlier this week they bolstered their crypto-position by acquiring some stake in Polkadot, the base token for which is DOT. Polkadot is the resolution to interoperability, which was one of blockchain’s key stumbling blocks. Chains couldn’t chat. The DOT token stacks other protocols on its base layer, giving a secure, self-governing solution that’s easily upgradable and scales decently.
It builds multi-variable bridges between blockchains that are capable of sharing data, and not just coins. You can still participate in DeFi on Ethereum using Tether, but you can also buy your cryptokitty from a position on Litecoin’s blockchain and bring it home using DOT. Beyond that, though, DOT facilitates data sharing between private and public blockchains—so proprietary information from a permissioned blockchain could be shared on a permission-less blockchain through DOT.
The technical specifics involved in DOT could lead us into a maze of strange and indecipherable technical jargon, which are really beyond the scope of this article. Suffice it to say that even the simple prospects of a bridge between Bitcoin and Ethereum’s blockchain—facilitated through DOT—is likely the reason why DOT is valued so highly, and is another avenue which Graph could miss out on if they don’t find a way to use it.