(Updated 10. September 2022)
I'm a long-term bull on Chainlink, but I still have doubts from time to time. In this article, I'll look into the future of Chainlink, and try to get a better understanding of the future of oracle networks in general.
Here's the short answer:
In my view, Chainlink had a future because wider blockchain adoption required oracle networks to connect blockchain data with real-world data. Chainlink's lead gave it a strong position at the time.
A separate analysis compares Chainlink with its oracle-network competition. At the time, Chainlink had over twenty times more adoption than its four biggest competitors combined.
However, this does not guarantee a future for Chainlink. We need to dig deeper than that.
I'm going to look at the future needs for oracles in general, and try to figure out if projects like Chainlink are going to be pushed out, and left on the curb of innovation.
Do Orcalce Networks (like Chainlink) Have A Future?
First of all, Oracle Networks is a sector in the cryptocurrency market. It's a category of crypto projects if you'd like.
They make sure that the real world and the blockchain world can communicate, by feeding data through "Oracles":
This is needed because without oracles, like Chainlink, blockchains would be isolated from the real world, which is bad for adoption. It also severely limits the specter of use cases of blockchain technology.
At the time, Chainlink had over 1,500 integrations and partnerships, and the oracle sector represented a measurable portion of the cryptocurrency market:
(source: CoinGecko)
The oracle network sector is not huge, but it is significant. Also, Chainlink makes up almost all of the value in this sector while the other sectors are filled to the brim with the competition.
How large this sector would become was hard to tell, but I expected it to persist.
Without Oracle Networks, blockchain technology will be limited, and real-world use cases will be few and far between.
Example Of Chainlink Use Case In The Real World:
One way Chainlink enables real-world agents to benefit from blockchain technology: The Theta Network, a decentralized streaming platform) brings data from Google BigQuery onto the Ethereum blockchain using Chainlink Oracles. This data can then be used by Advertisers to target users with relevant ads, and avoid fraudulent people:
source: https://blog.chain.link/
You know how when you've watched YouTube videos about crypto for a while, then suddenly all the ads you get are from Etoro and "crypto gurus" having webinars?
Well, this would not be possible for advertisers on the Theta network, a decentralized version of YouTube, if not for Chainlink.
Chainlink catalogued 77 possible oracle-network use cases.
The point I'm trying to make is this:
My thesis was that wider blockchain adoption depended on oracle networks such as Chainlink.
Whether that adoption translated into gains for LINK holders was a separate question.
However, I think that the price of LINK will move in tangent with the increased adoption of the general cryptocurrency market.
I separately explored a $1,000 Chainlink price scenario.
Conclusion: Yes, Chainlink has A Future
My conclusion was that Chainlink had a future if blockchain adoption continued.
After all, without a link between them, the real world and the blockchain world will forever be separated. Chainlink solves this, and links them together, allowing mainstream adoption to occur.
For that reason, I thought Chainlink could remain a vital player in cryptocurrency and blockchain adoption.