Last week, Chainlink Co-founder Sergey Nazarov joined Lex Sokolin on an episode of The Fintech Blueprint to discuss all things DeFi, the expanding use cases for hybrid smart contracts, the ever-growing capabilities of Chainlink’s decentralized oracle networks, and the creation of The Truth Machine – an impartial, decentralized, hyper-reliable system that provides definitive, cryptographically proven truth across a variety of industries.
Sokolin said he sees something “deeply optimistic” about the idea of The Truth Machine as a means to reengineer the world’s systems according to math-based models of truth. “I think it points definitely to an existential betrayal that many of us have experienced as we’ve seen technological systems go from promises and utopian framing towards some pretty perverse outcomes for the human condition,” he said.
“But there is this optimism that there is a ‘there, there’ – underneath the false promises, there is an actual fact.”
Sokolin asked Nazarov where he gets his sense of optimism.
“It’s coming from me seeing it be possible to use trust technology to solve problems that centralized information technology systems have been unable to solve for 40, 50 years,” Nazarov said. “The reason that I’ve devoted so much time and energy to this endeavor, to this industry, is because I see it work in a small form.”
He compared legacy systems of agreement between centralized entities to something as antiquated as oil lamps and emphasized the futility of trying to improve those systems after the advent of a superior technology – the lightbulb.
“I’ve seen the lightbulb filament in a vacuum be able to burn, and everyone is still thinking about ‘Hey, how do we make slightly better oil lamps?’”
Nazarov said hybrid smart contracts powered by decentralized oracle networks offer the solution sought by “decades of people” researching how to make deterministic, reliable agreements between the fields of contract theory, game theory, econometrics, and computer science.
“It’s really just that simple – I’ve observed it and I’ve seen it work in terms of securing data and in terms of making agreements that are pretty much unassailable by anybody.”
From Nazarov’s perspective, the lightbulb illuminates the faultiness of monopolistic power dynamics that allow large centralized entities to make promises they fail to keep.
“How much more can you improve oil lamps? Can you really improve them that much more? You’ve been improving oil lamps with information technology for 40, 50 years. You still have people lying about solvency and creating global economic worries. You still have people halting trading despite fifty-times promising to allow the exact activity they halted.”
Nazarov and Sokolin agreed that many people still don’t understand the value of hybrid smart contracts running deterministically on a blockchain and connected to real-world data through oracle networks. They either haven’t yet seen the lightbulb work or they think it’s just a novelty.
But, Nazarov said, “It’s just clear to me. I keep seeing some oil lamp somewhere explode and put a house on fire and everybody’s really sad. But I just saw a lightbulb work.”
To learn more about DeFi, oracles and smart contracts, check out Chainlink’s educational resources via the Chainlink homepage and visit the Chainlink blog for more in-depth research, use cases and tutorials.
Listen to Sergey Nazarov’s full conversation with Lex Sokolin on The Fintech Blueprint.