APIs and Blockchain — a trillion-dollar opportunity
Band Protocol (BAND) join OpenAPI Initiative to work with their members to ensure a common API standard for blockchain applications
This article has been republished in: Brave New Coin
Recently, on Dec 14th, 2020, Band Protocol (BAND) announced that they were the first blockchain project to join the OpenAPI Initiative.
Having never heard of the OpenAPI Initiative I thought this announcement warranted some research. I wanted to better understand what the OpenAPI initiative is, how big APIs are commercially, and if this announcement was a big deal.
Application Programming Interfaces (API) is a software intermediary that makes it possible for two applications to share information easily and efficiently to enhance accessibility and user experience. Most data that is shared with third parties is done via APIs.
RapidAPI, the world’s largest API Marketplace, has over 10,000 APIs and is used by over one million developers. They already process in excess of 1 trillion API calls a year, and their hockey-stick rate of growth is accelerating.
A quick look at the Top 50 Most Popular APIs on RapidAPI (2020) by developer usage you can get a really quick idea of who and where APIs are used and why they will continue to be so valuable.
The world is becoming an “API-powered economy” that will be measured in trillions of dollars annually.
Band Protocol’s (BAND) decision to join the OpenAPI Initiative (OAI) is strategically clever and beneficial for BAND but it’s also important for the whole blockchain ecosystem. Their membership will enable them to contribute towards the development of a common API standard that will ensure blockchain applications can easily leverage off-chain APIs to better engage with centralized data sources and the wider technology community, enabling expansive use cases of smart contracts.
“Our mission is to define a common API standard for blockchain applications by collaborating with prestigious partners to bridge the gap between centralized data, APIs, and smart contracts on the blockchain,” Soravis Srinawakoon, CEO and Co-Founder of Band Protocol.
OpenAPI Specification (OAS)
The OpenAPI Specification (OAS) defines a standard, programming language-agnostic interface description for REST APIs, which allows for people and computers to discover and understand the capabilities of a service without requiring access to source code, additional documentation, or inspection of network traffic. When properly defined via OAS, a consumer can understand and interact with the remote service with a minimal amount of implementation logic. Similar to what interface descriptions have done for lower-level programming, the OAS removes the guesswork in calling a service.
OAS is widely recognized as the most popular open-source framework for defining and creating RESTful APIs, and today tens of thousands of developers are building thousands of open source repos of tools leveraging the OAS.
The OpenAPI Initiative (OAI)
The OpenAPI Initiative is an open-source collaboration project of the Linux Foundation. It was created by a consortium of forward-looking industry experts who recognize the immense value of standardizing how APIs are described. The OAI is focused on creating, evolving, and promoting a vendor-neutral description format.
The OpenAPI Initiative (OAI) is membership-based with a who’s-who of tech giants. Since 2016 the Technical Steering Committee has been led by major tech players: Ron Ratovsky (SmartBear Software), Darrel Miller (Microsoft), Marsh Gardiner (Google), Jeremy Whitlock (Google), Uri Sarid (Mulesoft), and Mike Ralphson (Mermade Software).
Oracles & APIs
Blockchains do not have the built-in capabilities to talk directly to external systems and make API calls. An oracle enables blockchains or smart contracts to interact with external data. As blockchains are deterministic one-way streets, an oracle is a path between off-chain and on-chain events.
Inbound oracles bring off-chain or real-world data to the blockchain. Outbound oracles inform an external entity of an event that occurred on the blockchain.
Inbound oracles: allow data pertaining to real-world events to be called to the blockchain, with use cases ranging from automated trading based on the current price of an asset to gaming dApp payouts in the event of a win. Smart contracts contain the rules, and oracles provide them with the data they need to trigger and execute those rules.
Outbound oracles: work in the opposite direction, informing actors off-chain of events that occurred on-chain, such as smart contracts with the ability to send data to the outside world. An example would be a smart lock in the physical world, which receives payment on its blockchain address and needs to unlock automatically.
Oracles provide the bridge between this trillion-dollar API economy and blockchain. I believe that Band Protocol’s decision to join the OpenAPI Initiative and contribute towards a standardized OpenAPI Specification will benefit the whole blockchain ecosystem and accelerate the rate of innovation and adoption.
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Disclaimer: My research and articles are for educational and information purposes only. My views are my own. They are not investment advice.