Blockchain technology relies on real-time data to function, known as “off-chain data” in the blockchain industry. These can either be “inbound oracles” or “outbound oracles.” But now, API and blockchain developers have been creating new solutions that cut out the need for a middle man.
The API3 initiative‘s solution adds an abstraction layer between the API and the blockchain, which API3 co-founder Heikki Vänttinen calls a first-party oracle approach. This creates a layer of constancy and trustlessness that is essential for the blockchain. This connectivity makes it possible for the blockchain to interact with real-time data like sports scores or financial data; send or receive SMS; collect map data, and more. Some speculate this could be a trillion-dollar opportunity.
To this end, API3 relies on Airnode, their first-party oracle approach for connecting APIs to the blockchain. So far, many API-first businesses from the agricultural sector, biotechnology, open communications, banking, insurance, and supply-chain management have all joined the API3 Alliance.