Let's break down the difference between a 'Blockchain' and a @chainlink 'Decentralized Oracle Network' (aka a 'DON').

Everyone in crypto has heard of the former, but not everyone understands the latter.

While they share some similarities there are some important differences 🧵
@chainlink In concrete terms, a 'blockchain' is a peer-to-peer network consisting of unique nodes (computers) that help record transactions between participants and maintain consensus of the digital ledger tracking those transactions.
@chainlink To get more specific, a 'blockchain NETWORK' is the blockchain ledger plus everyone contributing to that ledger.

Whereas, a 'blockchain PROTOCOL' refers to the rules that govern the blockchain network.
@chainlink A 'Decentralized Oracle Network' is a network consisting of 'Oracles', which are independent entities that connect blockchains to external systems/data.

To be more specific, they allow verifiably true data to be input/output to blockchains which are otherwise closed off networks
@chainlink Quick note: similar to blockchain nodes, Oracles are ultimately just computers/hardware running specific software as well.

Some people might get confused by the general term 'entity' vs 'participant', so I like to describe it in as tangible terms as possible.
@chainlink So how are these two types of networks similar?

Well for starters, they both are decentralized digital networks that rely on coordination between its participants.

Specifically, these participants are trying to reach consensus on something that impacts the network.
@chainlink So how are they different?

One way that they are different is the type of participants. Generally speaking, participants in a blockchain network can be a mix of individuals and/or entities.

In the case of DONs, the participants skew heavily towards established entities.
@chainlink Another way that they are different is WHAT they are trying to reach consensus on.

In the case of a blockchain network, the network is trying to achieve consensus on which node has the right to append a new block of transactions to the ledger...
@chainlink In the case of a DON, the network is trying to come to consensus on what is the verifiably true piece of data to feed into a blockchain network.

This can range from a price feed to a random number (VRF) or proof of reserves (PoR).
@chainlink The important nuance here is that DON's are much more broad in terms of the types of use cases/data they process & need to come to consensus on

Blockchains are designed to be inherently narrow in terms of their functionality. As this increases network security & stability
@chainlink Some #Bitcoin maximalists even argue that smart contracts introduce security risks to some degree.

However, Ethereum and other layer-1s have proven that the value/range of use cases unlocked by smart contracts are worth any slight perceived risk in security & network stability.
@chainlink Hopefully this thread helped explain how these 2 concepts are different in clear terms.

I also tried to allude to why both types of networks need to exist, which is known as the 'Blockchain Oracle Problem':

blog.chain.link/what-is-the-bl… blog.chain.link/what-is-the-bl…
@chainlink Lastly, I know some simplifications were made in my descriptions above since Twitter has character limitations.

Let me know if I missed anything (or if you disagree) in the comments below!

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Alex Valaitis

Alex Valaitis Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @alex_valaitis

Jul 10
Over the past few months, I've grown an appreciation for @Twitter & I'm sad to see @elonmusk backing out

It remains the most underrated social platform with a high upside potential

Here are a list of things Twitter should do ASAP 🧵
#1) Fix Twitter ads foundations:

Today there's still WAY too many bugs in the end-to-end ad experience.

I had 2 bugs trying to input my credit card, my most recent campaign had a 32K+ discrepancy between ad dashboard and post analytics, etc 👇

#2) Lean into social tipping:

Make it easier to tip creators on their posts. It should have a dedicated CTA on each post itself (not just in bio).

Can accomplish this with TradFi payment rails to start or integrate with popular & affordable blockchains. Image
Read 6 tweets
Jun 4
There are 2 important aspects to the current state of crypto that are vital that people understand:

1) The vast majority of crypto use-cases are still driven by speculation

2) Global macroeconomic trends have an outsized impact on the crypto industry

A thread 🧵
Let's start with the first point. When I gave a talk at @MiamiHackWeek this year, I asked the room:

"How many of you have used a dapp who's purpose was to do something other than to make you more $ ?"

Almost nobody in the room raised their hand...
By and large, people participate in crypto to make more $

Yes there are some compelling use cases like utility-driven NFTs, Web3 social, global payments, etc

But most of these use cases are nascent & lack critical infrastructure to be a significant improvement over alternatives
Read 13 tweets
Jun 3
My research on #BNB chain is admittedly off to a slow start.

This is somewhat due to a seemingly smaller online community & less available content than other blockchains I've studied.

That being said, here is what I have learned about BNB chain so far 🧵
BNB chain stands for "Build 'N Build". It actually consists of 2 chains:

1. The 'BNB Beacon chain' (formerly Binance chain): For staking and governence

2. The 'BNB smart chain' (Formerly Binance Smart chain): Its EVM-compatible smart contracts chain
The history of BNB chain at a high-level 👇

2017: @cz_binance launches Binance, a crypto CEX (still the largest to this day) + the BNB token

2020: Binance Chain + Binance Smart Chain launch

2022: BNB chain launches as a merge of BSC and Binance chain
Read 12 tweets
Jun 2
I'm seeing a lot of @solana vs. @Cardano beef on my TL

Neither community seems to take the other seriously & both struggle to understand how the other project can be a top 10 coin

I studied both blockchains last month, and here's my take 🧵
What most people don't understand is that there are different dimensions upon which you can grade a blockchain.

These include: underlying tech/protocol, dapp ecosystem & usability, community, etc.

Here's how I analyze blockchains holistically 👇
IMO, @solana scores EXTREMELY high on their blockchain usability + dapp ecosystem.

It's super fast & cheap. And has a bunch of fun end-user facing use cases like their NFTs (which are 2nd to only Ethereum), DeFi dapps, and emerging use cases like @Stepnofficial
Read 12 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!


0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy


3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!