chainlink speechChainlink, Creating Definitive Truth: Sergey Nazarov Keynote at SmartCon

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chainlink speech Understanding the difference between a... Chainlink, Creating Definitive Truth: Sergey Nazarov Keynote at SmartCon
upbeat bright music - Hi everybody, and thank you very much for, for coming to our conference. I think its been an interesting day, and now the rest of the day, I think today is gonna be equally interesting. So at this conference, Id like to speak to you about some of the views I have on what Chainlink does, and how its evolving, and some of the technologies being included into it. One of the most useful and simpler ways of viewing what were doing, is the creation of Definitive Truth. So Definitive Truth for me is really what Blockchains generate in general, they generate a final immutable record, that cant be changed, cant be modified or improved in any way to anybodys individual benefit. And the fact that they generate this uniquely immutable record, makes it essentially true. And then that truth is confirmed by many different independent sources, many different independent machines, and in my opinion, I think intuitively would one of the things that attracted me to Blockchains, and one of the things I continue to find quite unique, is that because they generate all of this agreement through decentralized computation, and these tamper-proof methods of coming to agreement, using various cryptographic proofs, they create the strongest version of Definitive Truth, that are currently out there in computing systems. And it really forces you to think about what can Definitive Truth enable all of us to do, in the computing sphere, in the web world, in the Blockchain world, and thats part of what well be discussing today. I think the important thing is to really look at once again, theres assumption of what is Definitive Truth, and how do Blockchains and Bitcoins, initially take us in this direction of generating Definitive Truth. I think the first premise is that you have an unbreakable chain of events, that is cryptographically secured, and that unbreakable chain creates an immutable, permanent record that is considered definitive. And then the truth of it is assured through its confirmation across multiple, different machines, and its eventual memorialization after a set period of time as being true. And so once again both through cryptographic means, and through extreme degrees of consensus, among a multitude of different independent node operators, you arrive at both something being definitive and true, and so thats why I see Blockchains and decentralized computation in general, as giving us a pathway, a new unique pathway to Definitive Truth. If you actually look at different Blockchain systems through this lens, youll start to see that they provide different variants of Definitive Truth. Bitcoin, for example, provides Definitive Truth about Bitcoin ownership. And that creates a very reliable asset that somebody can own, in a way that they couldnt own an asset previously throughout history, short of having diamonds or gold bricks or something, in their possession. And the uniqueness of Bitcoin is really the fact that it has a definitive, immutable nature to it that says if you own a Bitcoin you own a Bitcoin, and thats beyond anyone elses control, its beyond governments control, its beyond an institutions control, its beyond anybodys control. And thats once again based on cryptographic proofs, and the fact that in this case, what youre seeing here is the pool of full nodes that are confirming the truth of Bitcoin. And so they after a certain amount of committed blocks, people come to assume that yes, this is the truth, this is the definitive, immutable truth about the ownership of this asset Bitcoin, and nobody can change that truth to their unique benefit. And this is kind of in my eyes, one of the ways of defining the unique innovation of Bitcoin and Blockchains, is this immutable, permanent, and highly validated truth about, in this case one thing, the existence of a Bitcoin, and the ownership of that Bitcoin by a specific private key. When you extend this lens of viewing Blockchain systems onto something like Ethereum or other more complicated systems, and Ethereum is also quite useful and complicated, but the real lens that you start to see this through is that you see more transaction types. So what you start to see is a large multitude of different Smart Contract states being confirmed, and these Smart Contract states being confirmed, now generates a new form of Definitive truth about, in Ethereums case a lot of token generation, token movement, voting, and various other now DeFi product,. so you have Smart Contracts state being confirmed, and its not just about a single asset, its about a multitude of different assets, and now also interest on those assets, and various other activities with those assets. So now you can view Ethereum as creating Definitive Truth about Smart Contract state, thats more expansive, and more complicated in that it can enable more types of Definitive Truth in the form of on-chain-data. What we Chainlink do is, I feel that we generate Definitive Truth about real world data, and real world events. And we generate that Definitive Truth to a sufficiently high threshold, for it to be useful by Blockchain systems, by these mission-critical, highly-reliable, highly relied upon, value-securing systems. And so the question then is what happens when you have on-chain-data that creates Definitive Truth, about token movements or token ownership? And what gets added to that when you can do Definitive Truth about real world data and events? And thats really kind of the new exciting world, that were all working towards, and were seeing evolve before our eyes. What we really do is we generate this Definitive Truth, so we take the worlds data sources, we take various events out in the world, and we essentially prove them to a sufficiently high standard, that they can be used by Blockchains. And I think the nuanced point here, is that Blockchains can create Definitive Truth about whats inside of them already, and this is things like Smart Contracts state, that are published into them or private key signatures or token movements. But Blockchains do not know, and cannot create Definitive Truth about things outside of them, thats just the way that theyre built, its part of the security assumptions inherent to them, and its part of the reason that they get the extreme reliability guarantees, that we seek from them, right. Its part of why theyre able to create Definitive Truth, is that they focus on the creation of Definitive Truth, at this layer one level of on-chain data. This is known as the Oracle Problem, and its a problem that were successfully solving at this point with the help of Chainlink, and decentralized computation in the form of local networks. But once again its important to understand that you have a very large innovation in Bitcoin, in the creation of Definitive Truth for the ownership of an asset namely Bitcoin, you have Definitive Truth being extended with systems like Ethereum, and other systems that now extend that Definitive Truth to various other states, Smart Contract states about assets or about new tokens or about trading, but that does not extend Definitive Truth to all the external events that you would wanna write a contract about. And it is in fact, also quite important to understand that the universe of contracts that is out there, is really not only defined by ownership, and token generation, and private keys, and voting, a lot of contracts are really about events in the real world happening, a market price changing, the delivery of a good, some kind of event with collateral or somebody approving something, at the end of the day, you really have two parts, two most automated digital agreements, you have the system of record, and the system that actually processes the logic. And then you have the system that feeds the triggers, and feeds the data that allows the Contract to evaluate what happened against these conditions. And this is where we fill in a uniquely important piece of the puzzle, around how do you provide the same level of Definitive Truth about the real world, to meet the high standards of Blockchains and Smart Contracts, and extend their capabilities, while extending them youll still wanna maintain their security and reliability, because thats a critical component of how they function. And so this is I think, the large body of work that were involved in. And I think Definitive Truth is just one way to phrase it, but its a way of phrasing it that Ive been becoming more, and more attracted to recently, due to partly its clarity and partly an explanation, to people about why would Blockchains, and Smart Contracts, and decentralized computational systems do, is actually quite unique and important. And its gonna become more and more important, as Definitive Truth becomes more and more in demand. I think we can already see the combination of Smart Contracts and Oracles, to create new versions of universally connected Smart Contracts, in the case of DeFi. So DeFi is really the composition of Smart Contract state systems like Ethereum, together with Oracle mechanisms that, like Chainlink, that use decentralized computation, to arrive at answers about Definitive Truth, in regards to things like market prices. So you really have DeFi evolving almost in lockstep with the amount of data thats available to it. And as we add more and more data, you have more and more products, more and more markets. And thats something were thrilled to enable, because what it means is that Smart Contracts are now evolving into something that can also generate, that can generate tokens and move the tokens, but it can now move those tokens into more advanced financial products, that interact with external data events. And thats really when you reason about DeFi as the beginning of this trend towards universally connected Smart Contracts, I think youll see that each DeFi product, that does something new and unique, really uses Oracles in some composable manner to generate interest or a synthetic product or something else. And thats really the trend that is starting to show the beginning of how Smart Contracts and Oracles being combined, can create more advanced, more composable kind of combinations of Definitive Truth into financial products that are uniquely reliable, and uniquely capable of providing security guarantees, transparency guarantees, and various other guarantees. I think the interesting way to consider this is not only how has DeFi evolved so far, and how have tokens evolved so far, but how will it continue to evolve? And for this, I think we can turn to some more traditional frameworks around how our new technology is adopted. One of the frameworks for this thats quite useful, is something called Crossing the Chasm, its a book about how people cross the chasm from early market technology adoption by certain group of users, to the mainstream market that, that often has different conditions, and I think this is really the start of what were starting to see now. So I think what were starting to see, is the transition from Blockchains are about tokens, two, Blockchains are about making financial products. And that transition is driven by many exciting and innovative teams, that are, many of which are at this conference. Its also driven by infrastructure like Ethereum, and various other Blockchains, that allow that Smart Contract state to remain tamper-proof, and to create a Definitive Truth about that state. As well as by the Oracles and the systems, that create Definitive Truth into those financial products, cause those financial products are once again made up of two parts. Now, I think the dynamic here is going to be that you continue to see more value flow into DeFi, and Crypto CeFi. You then will see the fact that DeFi and Crypto CeFis ability to provide superior yields, in a low-interest rate environment will be quite attractive to even mainstream users. That and the rate at which that evolves, will determine to a certain degree, the rate at which we cross this chasm. Theres no question that DeFi and Crypto CeFi, are more secure, and more transparent, and that their counterparty risk assumptions are better. The unique thing thats been necessary is part of their value proposition, and I think weve now arrived at a very strong value proposition, both in the creation of immutable, highly-reliable, new financial products, in the form of something like synthetics or other derivatives platforms, and in the ability to generate interest for the larger market. Now I think that interest for the larger market dynamic is really one of the things thats going to drive cryptocurrency, to continue to be put into DeFi. If you really look at the percentage of crypto thats in DeFi right now, its a really, really small percentage. And you consistently see people, even from the Bitcoin side of the cryptocurrency landscape, turning their Bitcoin into various, wrapped versions of Bitcoin, and bringing them into DeFi to earn interest. So I think were really even at the beginning of this trend, where you go from the innovators providing tokens, to generating those, to placing those tokens in interest-bearing, and various other financial products. And so I think theres a large amount of growth in the transition of that 360 billion into DeFi. The next logical question is then how do we go from the amount of cryptocurrency that currently is included in that pool that can use DeFi, and how do we expand that pool into the global landscape? So how do we arrive at a place where you move from cryptocurrency is something that I own, because I want exposure to cryptocurrency, to cryptocurrency or crypto assets, are something that I own as an institution or as a person because the guarantees of that asset, and the financial products I can use through that asset, are superior. And I think one of the things that, that I just wanna point out is that we are very, very early in the shift of how much cryptocurrency is going to go into DeFi, and that is part of the reason, its so rapidly accelerating, because I think people are starting to realize the superior nature of Smart Contract based financial products. And then people are also starting to realize that cryptocurrencies have various benefits, compared to traditional institutional systems. And its really the second part that we also need to be mindful of, so we need to drive additional features, additional capabilities into DeFi, to make it the best possible, most secure version of financial products out there in the world, relying on Definitive Truth from Blockchain systems, and various Oracle systems together. But then we also need to reason through how do we enable the worlds global economy, to shift its value into a Smart Contract, based format. Whether thats through crypto startups, web companies or institutions moving into providing that value into these systems. And I think what this slide is really meant to illustrate is that were at the very, very, very beginning of this, because the amount of value that is out there in systems, that dont have a fraction of the security, transparency or various other guarantees, that Smart Contract systems, in all their different private and public forms can provide is massive, and theres long running issues with those systems. So I think this transition is going to occur on the basis of a few key dynamics. Theres one slow dynamic, and theres one fast dynamic, the slow dynamic is interest yield, so right now we are in a very low-interest rate environment, its not clear to people how were gonna achieve a higher-interest rate environment, than the traditional markets. And people are worried about inflation and various other concerns, its a very valid concerns, its very unfortunate that the world economy has gone in this direction, but it has, and I think that peoples appetite for both yield and combating inflation, is going to become massive. That is the first place where you really see DeFi financial products, and their efficiency, and transparency, and ability to include various other collateral quickly is unique. And the ability to really generate massive, consistent yields, from various diversified categories of assets, is something thats gonna be quite attractive to the global financial markets. And once they realize that on top of that yield, they get transparency and security, and much more control, and much less counterparty risk, thats really gonna be the huge benefit, cause the second dynamic, the dynamic thatll move fast or could move fast, is the dynamic around counterparty risk. And I dont feel that counterparty risk is sufficiently understood, by either our engineering community in our own space or in even parts of the financial community, but definitely not in the consumer sector. So, counterparty risk, is a fundamental aspect of making financial transactions happen. Its basically the risk that the counterparty youre dealing with, will not follow through on their obligations. And there are various contractual provisions, that people in financial markets make to mitigate this risk, and to minimize it. In consumer transactions a lot of those costs are hidden, and then kind of enterprise transactions they still exist, but theyre not always discussed as counterparty risk. Now, in the slow mode you have yield in-demand, and inflation combating things in-demand, both yield, and combating inflation is something that cryptocurrencies, and DeFi high yield products, even if they stabilize are gonna be exceptionally good at, so thats low case is very positive. The case where things can move very quickly, is if the solvency or the reliability of brand-based guarantees begins to erode. Now, this is actually a very scary thing, and itll mean some scary changes in the world, but the reality is that if the world that were in now, is based on some kind of institution or firm or enterprise, saying you should trust my insurance company, you should trust my financial institution, you should trust me because I have a logo, and that logo has been solvent in successfully executing contracts for 100 years. If that begins to fail, like Wirecard, like other examples, where people begin to look into the solvency or to question the solvency, and the reality is that a lot of solvency is based on market dynamics, and the market is still in a very good place. So if the market doesnt go to a good place, if it goes to a bad place, and you have people whose solvency is based on the market being in a good place, well then solvency becomes an issue, and the brand-based guarantees of trust my 100-year logo, begins to erode very quickly and possibly disappear. And I think the fundamental question that everybody should ask themselves, when thinking about Blockchain systems, in their core, core foundational value, is if brand-based guarantees are no longer acceptable, where do we go? What do we do as a society that wants to conduct global trade, global financial transactions, and kind of interact on this contractual basis, when somebodys brand no longer assures me that theyre solvent, and that I can rely on them, and that I can do transactions with them? If we get to a world where that is a question or a fundamental question for many transactions, then math-based contractual guarantees, of which Blockchains and Definitive Truth based systems like DeFi, are the absolute pinnacle, those systems will immediately become in demand. You actually already see this in various countries, where unfortunately the local government or local institutions were not able to provide certain guarantees about reliability and solvency. In various countries where ATMs are locked up like Greece a few years ago or other countries, you start to see wallet registration numbers on public Blockchains from IPs in those geographies skyrocket, 300%, 600%, and thats what youre continuing to see. So the signal that people value math-based guarantees is definitely there. The signal that people are worried about brand-based guarantees, is increasingly, increasingly looming on the horizon, because nobody can quite understand exactly how the global financial system, will go through this without a huge shock, that will question a lot of the solvency, and brand-based contractual guarantees of various systems, institutions, enterprises and so on. And so I think that the slow case is very compelling, the fast case is kind of scary, but it goes to the core understanding of how Definitive Truth based systems, give you a different relationship with risk. And risk isnt something that people always care about until they do. And I think were unfortunately gonna be at a place where people do care very much about risk, and counterparty risk specifically. The final thing is security, and I think youre definitely gonna want more security in your systems, but youre going to really be focused on how do I generate a high-yield product, that has low counterparty risk? And if its secure all the better cause I keep hearing about a multitude of security issues. So this is kind of my reasoning for why Smart Contract adoption, will continue crossing that chasm in the slow case, but also very possibly in a fast case. This is something I think were already beginning to see, there are certain institutions, that are those web tech firms, if you look Back at that slide, youll see that the early mainstream is actually web technology firms, because web technology firms of all the enterprises, and even digital banks are the most well positioned to truly assess this counterparty risk guarantee. And so youre already seeing certain finance departments have very forward-looking, well-run Web 2.0, kind of companies, once they understand that theyre possibly gonna be in a high-inflation, low-interest rate environment, where their counterparty risk is one of their primary risks. The firms that understand that, even if theyre run by really competent financial people pull the trigger and go ahead, and make cryptocurrency their fundamental hedging strategy. And I dont think that all firms across the world will do this, but I think they will do this in a large percentage, and its fundamentally based on these assumptions about yield, as well as these assumptions about counterparty risk, which are in my opinion, in pretty much guaranteed to play out at some speed, the speed at which they play out is kind of the question at this point. In order to provide those guarantees, that people like MicroStrategy want to rely on in Bitcoin, in the Bitcoin that theyve now gotten, maybe they wanna earn interest on that Bitcoin, and they wanna put it into a DeFi product, we as a space, and as an industry need to continue to deliver that guarantee, we need to continue to deliver Definitive Truth. We need to continue to deliver highly-transparent, cryptographically secure systems, and were thrilled to announce that, today here at the conference that, in service of that goal, were doing a few things at Chainlink. So one of the things that were doing, is weve recently acquired something called DECO, DECO is unique method for using on which the entire internet securely operates now, its unique method for using to transmit data to various web systems, Blockchain systems, and enterprise systems, and Ill tell you about that in a few minutes. But its a very exciting thing, which basically extends with TLS, thats running in all of these global servers can do, and it extends it to provide a new level of data security, when transmitting data and proof, as well as a new level of privacy around that data, which will allow that data to now mesh much better with the public nature of Blockchains, because the data does not actually need to go on the Blockchain. The data can be confirmed in a way that keeps it private, but allows it to be effectively used on the Blockchain. Were also creating a Full Research program, over many years now weve been working with exceptionally talented research team, and due to our recent success, were very lucky to have the resources and everything we need to expand our research team even further. Weve also not been super public about our research, and we havent always extended as much clarity about all the ongoing research were doing, but were going to be changing that, and making a full research program, where we have a large research team, thats gonna continue to grow, thats gonna be very well funded, and that were gonna have various research grants for, and thats gonna be, its gonna continue to be composed of the best researchers in the security research, cryptography, and computer science disciplines. And in service of that goal, were very, very grateful and thrilled, to be working with Ari Juels, who is joining Chainlink Labs as its chief scientist. Ari is really one of the people thats had a very large impact on me over the years, and that we were very lucky to have written down initial Chainlink White Paper with. Me and Steve were very, very lucky to have put that together with Ari, and Ive had the pleasure of working with him for many years, on making Chainlink better and better. Now he is luckily working with us in a more kind of involved capacity as the chief scientist, who is running the research program. And DECO is one of the first things that we are finalizing, the kind of research and productization of, through the research program, in addition to a number of other things, such as Mixicles, Town Cryer, and many other innovative methods that we would, that well be looking forward to releasing soon. Now to jump into DECO, I think that the way to view DECO is that, you have the whole internet running on servers for secure data. and the appearance of and TLS, really provided us with a way to expand what the internet did. Because before that you didnt have encrypted transmission of highly sensitive data. And so you wouldnt be able to do something like send the credit card number, but once and TLS appeared, you were able to send credit card numbers, and amazingly enough that gave rise to E-commerce, so now that I can send payment information, I can have E-commerce. So the consistent history of what happens when you make data more secure, and more private, but still allow people to use it, is that people then compose that data into massive new industries, massive new use cases like E-commerce. And I feel myself that DECO is a similar innovation, DECO is an innovation that allows all the worlds data, just like allowed all the worlds credit cards to be used on the internet, DECO allows all the worlds data thats in format, which is pretty much almost all secure data, to be utilized by Blockchain systems, with two key properties. The first thing that it can do is it can prove that a piece of data came from a specific TLS session, at a specific time. And the second thing that it can do, is it can provide confidentiality about the data, while still proving that the data is a certain way. So this means we can now prove that the data came from a specific source, and we can prove that it came from a specifically timestamped-TLS session. And we can do this in a zero knowledge proof, but also decentralized manner, without exposing that data to a large decentralized system, which would compromise its privacy. So you maintain the privacy of the data, which allows it to be used, but you provide the guarantee that both the data came from a specific source, in a specifically timestamped-TLS session, and you are able to prove that the data is a certain way. So youre able to prove that the data is a certain number or a certain change in the data occurred, without actually revealing the data to a more public system like a Blockchain. Later today, Ari will be describing this in more detail, and this is just kind of a short general overview. Generally speaking, I also like to look at use cases when describing some of these systems, so some of the use cases that Im quite excited about, are things like market data. So theres a multitude of different, unique specialized market data, thats considered premium and private. And taking this data, and moving it into a Blockchain is sometimes difficult because the private or the high cost of the unique nature of it, makes it something you dont always wanna expose in a more public chain. And this also has to do with higher frequency data, and a number of other premium data dynamics, which weve been involved with for half a decade now in our kind of quest to make sure that, not only do we deliver Definitive Truth, but we deliver the highest quality data about the world, thats then made into Definitive Truth. So I think one of the things DECO will do is, itll enable us to properly generate, well basically make accessible, all the premium, private, and unique market data, that previously might not have gone onto a public Blockchain or even a consortium chain, which is kind of a semi-private environment, where people still worry about releasing data that they wouldnt want to be considered public. So the ability for us to now put the highest quality, highest frequency, and unique datasets, to generate even more unique, high quality data products, is being made more possible. And this I think will actually enable DeFi products on scalable chains, in environments where higher frequency, premium various premium data can function well. Itll enable them to go to feature parity and beyond, with the financial industries current systems, because those systems can consume premium private, and unique market data, and so we need to at least reach feature parity but also go beyond that. The second use case, that I think is going to also have a big impact, is the ability to confidentially prove a collaterals solvency status or capability, So what you really wanna prove, is that theres a piece of collateral, its in a certain state, its in a good state, its operating properly, but the source of the collateral might not wanna reveal that data, so the source of collateral might not wanna reveal their invoices, they might not wanna reveal the status of their real estate holdings, they might not wanna reveal the shipping of a certain good, but you still want that collateral, as part of the collateral that goes into DeFi, to make this highly-diversified, high-yielding environment. And so your question is now how do I properly verify that this collateral is of a certain state, while maintaining the confidentiality requirements of the collateral source? And once you meet the confidentiality requirements of the collateral source, once you say to them, Look, you can put your collateral into these markets, and get paid for that collateral. But you dont have to reveal your critical kind of institutional data in the process. Once again the universe of data, and therefore the universe of things you can do, the universe of collateral greatly expands, and were already seeing this happen in many of our meetings, and this is something that could accelerate the variety, and amounts of collateral that make their way, onto various collateral driven DeFi products. The next example that Im also fond of is the ability to prove certain AML/KYC and identity data, without exposing that data to a public Blockchain. So there is an issue where how do I provide proof about myself, as some kind of accredited investor or a certain category of users, that are allowed to use a product, which is a requirement that institutions may have for taking DeFi products and selling them themselves, so you could actually, I could actually see many banks, and starting with digital banks, taking DeFi products and selling them to their users. But in order to sell them to their users, they would need to meet certain requirements, and those requirements would often be around identity. And these requirements are the things that AML/KYC data is uniquely good at solving. But the problem then is once again, Oh, I have this data, I wanna keep it private, but I also wanna use it. I wanna keep it private and secure, but I wanna use it in a Blockchain cause that its a really in demand sector for this data to be used. And so once again, we can deliver, an ability for that data to maintain its privacy and confidentiality, because it never makes its way onto a Blockchain, and it actually only ever has to relive, and reach a single DECO Chainlink node, with the other DECO Chainlink nodes, simply verifying the proof, and therefore, they dont actually need to receive the data. You can now see a world where identifiable data, can be verified to the high standards of a Blockchain, to make sure that the Definitive Truth of identity is maintained throughout the process of providing it to the Blockchain. But the privacy and confidentiality requirements of that data are also maintained. And once again, you see that the ability to make data private or the ability to keep data private, and make it more secure, enables its usage in many exciting ways. One of the final ways that Im also very interested in is the ability for single source enterprise events. So you do see a number of enterprises, cautiously going into taking their Blockchain PLCs out of PLC mode, and into pilot and maintenance stage. And thats a very exciting thing, because I think these are the kind of early mainstream enterprises, that see the value of Blockchains, and have been researching them for years, were really lucky to work with some of them, and I think I do see that they have a big future, but they also have a slightly different set of requirements. And two of their requirements are, I need to be able to connect to all my, all the different Blockchains, Im kind of sick of trying to figure out which Blockchain wins, especially because Im a multinational. And the second requirement is I have a lot of enterprise events, and those enterprise events are private, theyre private to my system, I want those enterprise events to be proven to a contract, I want them to trigger a contract, and Im glad for them to go through some method of validation in the contract, Smart Contract system, but I am not comfortable disclosing those details. So enterprises have multitudes of data about how, multitudes of different categories of data, that they would use to trigger their contracts, and they want to use to automate those contracts. But once again, theyre highly sensitive about revealing that data, and the security through which that data would ever even be transmitted to another system. And so once again DECO, can ensure that the data is securely transmitted, and that the data is properly validated, from a single source, in a decentralized manner without exposing that data to a Blockchain or even a huge amount of nodes, because your knowledge proofs allow us to have that data reach even a single Chainlink node, and be validated by the other nodes in the network, to meet the requirements of the zero knowledge proof, and then that proof to be eventually kind of relied upon, and in various ways represented on a Blockchain. I think the enterprise use cases is meaningful, its in the medium term, I think the immediate use cases are definitely defined, collateral and insurance. But enterprise, I think is not to be underestimated, because it really relates to where a lot of that value, and that graphic sits right now, and there will be some of that value that shifts, over to web companies that implement crypto systems, and even over to DeFi applications. But I think theres still a large amount of value that will be in those systems, and so the requirements against which were building, need to enable people to meet their requirements. Its not about my requirements, its about our users requirements, and the categories of users, are once again from that Crossing the Chasm, Crossing the Chasm graph, you have the DeFi users, you have the Web 2.0, and early adopter Fintech, Insurtechs, then you have the enterprises. One of the large questions for the enterprises, is how do I deal with Blockchains generally? Because enterprises dont wanna choose a Blockchain winner, they dont care about choosing a Blockchain winner, all they care about is conducting transactions, in their specific, vertical industry in the environment, that other people wanna conduct transactions in. And therefore, what you actually need is you need a single kind of abstraction layer, that can fit into their existing architecture, and allow them to interact with all these Blockchains. And thats where all the time and energy, and money that were investing in, properly integrating natively with these many different chains, that is going to create the interface, through which various enterprise systems can then interact with those chains efficiently. Which really just benefits everybody, it benefits the enterprises cause they can efficiently interact with the Blockchain sphere. It benefits the platforms they interact with, because those platforms now get access to all of their data, and all of their kind of resources, and all of the value that they could put on chain. And it obviously benefits Chainlink, because it leads it to become more of a standard, a global standard for how the enterprise landscape, interacts with Blockchains through an abstraction layer. And so I think this is one thing thats also not fully understood, but you will need a Blockchain abstraction layer, for enterprises to make a single kind of purchasing decision about how they interact with Blockchains, because Blockchains will not only continue to interact in their local market, but these are multinational enterprises, and theyre not going to be able, even if all the enterprises decided to choose a winner, there would be a huge crunch in demand for engineers. And you would need a Blockchain abstraction layer, that would cover all the different geographies, where there were even geography specific winners. So in the medium term, youre going to see a need for a secure Blockchain, middle-layer a secure Blockchain abstraction layer that enables those interactions. And once again, I think this is the meaningful way to think about this, how do we as an industry, want to cross this chasm? How do we wanna go from our industry started with tokens, and it generated a lot of tokens, that brought a lot of value into our industry, thats great, thats a huge step forward, and its really whats come to grow our industry to where it is. How do we then evolve into these early adopter use cases, in DeFi and crypto CeFi? How do we expand those as fast as possible with the best quality data? How do we properly grow that securely, so that it still represents Definitive Truth? When people use those systems, they need to see Definitive Truth on the Smart Contract state level, on the data level, and even on its interactions with various other payment systems. And so how do we maintain that high standard, of low counterparty risk for the systems we build? And then in what way do we cross this chasm right? What happens with the interest rate environment, and how people start to view DeFi, and Blockchains, and cryptocurrencies, as the method for generating yield for them? How do people continue to evaluate the security benefits of Blockchains, and also very importantly how does the transparency, transparency and immutable nature of these systems, generate a different dynamic with counterparty risk? And this final transition to a world where people are cognizant of their counterparty risk, cause theyve probably experienced an event, like Wirecard, but much more frequently and at much larger sizes, to the point where counterparty risk, has consistently become a real consideration, in how they evaluate the systems they use, and the contracts they engage in. And I think what we as an industry, and we as a project at Chainlink need to do is, we really need to be ready to service all of these stages of adoption. We need to be able, we need to enable DeFis growth, we need to enable the transition of Crypto CeFi into a more decentralized model. We need to enable Web 2.0 tech firms, fintechs and various other banks, to efficiently transition to using this decentralized infrastructure. And then when the remaining enterprises of the world, come to a place where they say, This is the way, that I wanna conduct financial transactions. We need to give them an efficient, well-made cryptographically secure, method for interacting with this infrastructure, while maintaining their privacy, which they will absolutely have to maintain, and maintaining the high level of data integrity and reliability. So I think thats the overview that we have time for today, well be having more information, and details about our research, and all the work that were doing here. But also in the upcoming panel, Ill be speaking with Ari, and welcoming him once again to our team, and to the larger Chainlink ecosystem as our chief scientist. And discussing some of the interesting things were working on. Im looking forward to seeing you at the panel, and thank you again for attending our conference. And also thank you to our amazing speakers, who made the conference a success, and to Rory and Adelyn, and all the people in the marketing team, that have been working day and night, to make this an amazing conference. Thank you very much, and Im looking forward to speaking with all of you soon thank you. slow beat music upbeat bright music Chainlink-powered decentralized oracles provide smart contracts with definitive truth about the validity of real world data. In this Keynote, Sergey Nazarov explains how Chainlink is using its secure and reliable oracles to expand the addressable market of smart contract applications into the trillions, thanks to opening up blockchain applications in DeFi, CeFi, Fintech, Web 2.0, and enterprise systems. He also discusses Chainlink’s new DECO acquisition and how it opens up access to web data for smart contracts while preserving data security and confidentiality.Chainlink generates definitive truth about real-world data, made accessible to blockchain-secured smart contracts DeFi evolves in step with oracles—As more off-chain data is provided to smart contracts, DeFi grows in its ability to produce value Smart contracts reduce counterparty risk, an enterprise business requirement DECO is compatible with all the world’s data currently transferred over format and can prove data came from a specific TLS session at a specific time Through DECO, Chainlink will be able to preserve enterprise data confidentiality when used on public blockchains, allowing them to use blockchains in a way that was not previously achievable New possibilities open up for decentralized ID, supply chain data, proprietary financial data, and more SmartCon 0 ran August 28-29, 2020. ____ 0:00 - Introduction 0:34 - What is the definitive truth 2:39 - How Bitcoin is a definitive truth about Bitcoin ownership 4:09 - How Ethereum is a definitive truth about Smart Contract State 5:15 - How Chainlink is a definitive truth about Real-World Data/Events 6:19 - The Oracle Problem for Smart Contracts and decentralized oracle use in the growth of DeFi 10:59 - How definitive truth will permeate all financial markets 14:26 - The remaining market for smart contracts is trillions of dollars 16:40 - Brand based contractual guarantees vs math-based contractual guarantees 24:00 Forward-looking Web 2.0 firms are already converting and looking to Web 3.0 24:48 - Announcing the Acquisition of DECO and Chainlink Labs 27:30 - Providing data source origin with confidentiality through DECO 29:59 - Use-cases of DECO 37:00 How to enable enterprises to Web 3.0 ____ Chainlink is a decentralized oracle network that enables on-chain smart contracts to securely access off-chain data feeds, web APIs, traditional bank payment data, and more. Chainlink provides highly secure and reliable oracles to large enterprises Google, Oracle, and SWIFT and leading smart contract development teams working on Bitcoin, Polkadot/Substrate, Synthetix, Aave, and many others. Learn more about Chainlink: Website: Twitter: Telegram: Newsletter: If you’re a developer, make use of our documentation and join the technical discussion on Discord