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The Evolution Of Trust-Minimized Applications And Cryptographically Guaranteed Agreements

Yesterday, Chainlink co-founder Sergey Nazarov joined Nasdaq Trade Talks host Jill Malandrino live in-studio to talk about the evolution of trust-minimized applications enabled by Chainlink’s decentralized infrastructure.

Nazarov re-emphasized a prominent concept from his recent presentation on Chainlink Economics 2.0 – that the demand for encrypted relationships between peers, brands, and institutions will naturally and inevitably follow the demand for encrypted communication over the past decade.

Nazarov said the current market downturn has positive implications for the proliferation of trust-minimized applications.

“If the world becomes scarier,” he said, “they are the way that you restore faith in contractual relationships, in peer-to-peer relationships, in institutions, because you can cryptographically guarantee those relationships.”

He continued, “In today’s world, we have a lot of brands that make promises that they can renege on. And they can renege on those promises because there’s nothing really forcing them to follow through.”

While brands and institutions that fail to fulfill contractual obligations face ramifications from both the legal system and the court of public opinion, Nazarov explained why a cryptographically guaranteed world offers what he views as a superior alternative.

“Contracts get honored because mathematics forces them to be honored, just like mathematics keeps your messages secure,” he said.  

“That same concept will become extended to all contractual relationships, where you’re going to want your relationship with your bank to be cryptographically guaranteed, so there’s no chance that the bank won’t give you your money. You’re going to want your relationship with your insurance company cryptographically guaranteed, so there’s no chance that they won’t pay out your policy.”

Ultimately, Nazarov said he believes the failure of current systems combined with factors like inflation will incite a positive shift over the next decade. “Through this market downturn, I think we can get to a good place where cryptographic guarantees power contractual relationships.”

Watch Sergey Nazarov’s full conversation with Jill Malandrino on Nasdaq Trade Talks.

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