Former Google CEO and Chairman Eric Schmidt believes blockchain oracle network Chainlink has "better technology" and "scales better" than other cryptocurrencies like Bitcoin and Ethereum.
Chainlink uses software called oracles to connect data to blockchains, designed to help cumbersome decentralized networks to scale.
Schmidt is also now the chairman of Steel Perlot, which describes itself as a “deep tech management company with in-house startups and investment vehicles, focused on new money and distributed systems, physical sciences, applied AI/ML, and synthetic bio/life sciences.
Schmidt said this during a keynote conversation with Chainlink creator Sergey Nazarov at SmartCon 2022. It’s important to note that Schmidt became a strategic advisor for the company in December 2021, after creating venture arm Schmidt Futures in 2017.
The event, wrapped around Web3, show how technology can move into the next generation.
“I’m historically a skeptic,” he said. “Although I like the beliefs and the values and the technology, I think marketing got a little ahead of reality.”
Schmidt called the work Chainlink does — along with the basic principles of Web3 — trusses, immutable, and distributed. He says those attributes are “really powerful for computer systems.”
At first, he had doubts on whether Web3 would become big enough, until he heard about Layer2, where tokens are used to incentivize behavior. He said this “was a really powerful development” within the past three to four years, and said people in the audience were ahead of the academics and economics in terms of understanding how it works.
The value of the coins increases with demand, based on an economic structure, with a new way of tying compensation and incentives to network scale. And that’s a big deal, Schmidt said.
“In my whole career, I’ve always had compensation tied to stock options tied to corporate wealth,” Schmidt said. “But the fact that the token goes up in value based on network effects is a real discovery. I don’t think people understand the real economic of this.”
One thing is missing: most services around Web3 are hosted on Web2 cloud services. They do not run on decentralized cloud services in the context of distributed networks.Nazarov believes this could be one direction that Chainlink will take, with more computation moving into oracle networks because blockchains do not fulfill the need for scalability and privacy. There will be an interim stage, he believes, where they will not fulfill the requirement, so a bridge is needed. Those requirements are what oracle networks seek to fulfill.