Chainlink, a major smart contract technology supplier, has partnered with Hdac Technology, a blockchain startup founded by Dae Sun Chung, the CEO of Hyundai, the largest car manufacturer of South Korea.
It has been reported that by bringing their forces together, the firms intend to jointly develop a system for delivering off-chain data on the blockchain in an attempt to bolster smart contract execution.
Specifically, Chainlink and Hdac will be addressing the blockchain oracle problem, which is considered to be the biggest obstacle in commercializing smart contract technology. As described by Bitcoin (BTC) developer Jimmy Song, the Oracle Problem refers to the security and trust conflict associated with linking a digital asset to a physical asset, which is required for the trustless execution of smart contracts.
A blockchain oracle is a basic component of smart contracts — special contracts that are designed to automatically verify or implement the negotiation or performance of the contract without the participation of third parties.
As per the report, a blockchain oracle is a system that provides the necessary off-chain or physical data for a smart contract to be executed when the terms of the contract are met.
As such, the Oracle Problem refers to the fact that smart contracts do not have the ability to determine the authenticity of real-world events on their own. They are only able to execute once they receive data from a predetermined source of truth, called an Oracle. This reliance on a third-party source of information removes one of the key features of smart contracts: trustlessness.
While Chainlink and Hdac consider their collaboration to be a technical effort, some industry players argue that the Oracle problem “isn’t a problem,” by claiming that the solution to the problem is always social rather than technical.
However, by partnering with Hdac, Chainlink intends to integrate its oracle middleware solution with Hdac’s decentralized applications to securely access off-chain data. This will allow them to communicate with external systems, such as other blockchains or payment systems, as announced by Hdac.
As part of the collaboration, Chainlink will be verifying off-chain data using a collection of multiple validating partners that are able to confirm off-chain events and deliver data to the on-chain smart contract.
Thus, Chainlink token is trading at $3.7, down nearly 7% over the past 24 hours, following another wave of red on the crypto markets.
Source: cointelegraph.com | Image: medium.com