Connecting The Blockchain Internet To External Services Through HTTP Calls
Background To Web2 Collaboration & Development
The Internet is great because entrepreneurs, app creators, and web developers can easily connect with other like-minded individuals or services to create new products. This is because the Internet allows people to build and innovate on top of existing web services, data providers, and other functionalities through APIs.
The Internet essentially facilitates communications from person to person, person to machine, machine to machine, and software to software. This type of smooth communication is a significant benefit to open innovation and successful entrepreneurship, especially if you’re able to take someone else’s service or product and implement it into your own service or product.
However, because this is such a valuable asset, i.e., data, internet services, and software, it can get expensive fast, and ‘walled gardens’ start getting raised. This is especially difficult in the blockchain space because blockchains are completely separated from the Web2 world, notwithstanding other blockchains.
This is why people say “blockchains are stiff, not interoperable, have limited smart contract functionality, and can’t be used for much.” These four complaints are not wrong and are quite valid.
Blockchain interoperability with other blockchains and the traditional web is still underdeveloped and plagued with technical issues, many layer 1 blockchains have limited smart contract functionality, and blockchains can’t be used for many services outside of the blockchain industry.
However, the Internet Computer is fixing these issues with a new direct integration to Web2 vis-a-vis HTTP callouts. Other smart contracts on Ethereum and Bitcoin for example can’t interface directly with Web2, they rely on oracles such as Chainlink. But the Internet Computer’s new product evolution will mark the first time in history that a smart contract can make HTTP requests to Web2 services.
This is why the Internet Computer defines itself as “a radical new design of blockchain that releases the full potential of smart contracts, overcoming the limitations of smart contracts on traditional blockchains with respect to speed, storage costs, and computational capacity.”
What Does This Product Development Mean For The Internet Computer & Industry In General?
What this means is the Internet Computer blockchain and thus, regular DApps and DeFi DApps on the Internet Computer can directly integrate with Web2 APIs, Web2 data and information, Web2 software, and Web2 internet services.
For example, if a basketball game being developed on the Internet Computer wants data and information about the NBA in real-time, it can now request this data. Moreover, real-world exchange rates can now be brought into the ecosystem, weather information, anything really — even including maps (Google), logins, payments (think Stripe), travel booking (such as flights and hotels), and Twitter (or social media uses).
This is what’s great about blockchain oracles is that they allow blockchains to be able to connect and retrieve information from the digital “real world.”
But even better, the Internet Computer doesn’t need to use a decentralized oracle such as Chainlink to get this data and web information, it can do it directly. This is a complete game-changer as it cuts out one additional middleman.
Therefore, this adds another simple incentive to the matrix for developers choosing to create apps on the Internet Computer. Now, these developers can do more with their applications and smart contracts, thus, they can “unleash the full potential of smart contracts.”
What happens technically is HTTPS outcalls will allow canister smart contracts to request a URL (this is the beginning of the retrieving process), and then each node in the subnet blockchain will request the URL separately and then pass the result they obtain to a special function implemented by the requesting canister. This is the consensus process to make sure the callout is agreed upon and correct. In the end, the result will be provided back to the smart contract that requested the URL.
The takeaway here is that Internet Computer HTTPS outcalls remove the need for trusted oracles and bridges.
In summary, this gives the Internet Computer blockchain a new smart contract functionality that developers will love, it further integrates the Internet Computer with the traditional web, thus allowing it to better integrate and acquire Web2’s best features, and it upsets the balance of power competitively in the decentralized oracle and layer 1 blockchain smart contract platform space.
What’s The Market For Decentralized Oracles?
Chainlink is the top oracle out there. It dominates the industry with a 75% market share, mainly because it benefits greatly as a first-mover in the space. But in total, it’s still a $4 billion market.
What this means is that it’s still early in the oracle space competitively, so the Internet Computer coming out with this new upcoming release will be another factor Ethereum and other developers will need to watch out for.
Conclusion
As blockchains and smart contracts improve, the demand for data and thus, oracles will increase. However, because the industry prides itself on decentralization, trust, low cost, and security, the widespread use of centralized and decentralized oracles like Chainlink may begin to taper off — especially, when the industry discovers these actions can be done directly on the Internet Computer.
Stay tuned for when this functionality is fully out! Direct blockchain to data and information is the future. This is what decentralization is all about, direct peer-to-peer interactions and business.
