Coinbase Cloud joins the Chainlink network as a node operator

Coinbase Cloud joins Chainlink as a node operator. Gabby Jones—Bloomberg via Getty Images

Coinbase Cloud, which provides blockchain infrastructure for crypto companies, is joining decentralized oracle network provider Chainlink as a node operator as it looks to help improve the sector’s underlying technology.

The infrastructure provider linked to US crypto exchange Coinbase is the latest of several high-profile names to become node operators, including T-Systems Multimedia Solutions, a subsidiary of T-Mobile’s parent company, Deutsche Telekom. Coinbase Cloud’s contribution as a node operator will strengthen the technology, according to Kai Zhao, the group product manager at Coinbase Cloud.

“Our participation in Chainlink’s decentralized Oracle Network is a declaration of our commitment to the security and reliability of smart contracts,” Zhao said in a statement. “We believe on-chain is the next online, and we look forward to working with Chainlink to advance this future.”

Over the past couple of years, Chainlink has expanded its dominance in the crypto industry with high-profile integrations across networks, services, and with organizations like the National Basketball Association, which use the technology for its dynamic NFTs.

Chainlink, as the name implies, is a link from the blockchain to outside world data, which is often used to build robust smart contracts that deal with everything from cryptoloans to insurance.

Smart contracts on their own cannot access data off-chain, so Chainlink helps by gathering data from multiple off-chain sources, called oracles, and sending it back to the blockchain. In theory this is safer than if a single oracle was called for the data because they would control everything. If a smart contract requires accurate pricing of a cryptocurrency, for example, Chainlink allows its decentralized network of price oracles to find a consensus on the current price, which it reports back.

But to bring the data of these off-chain oracles together, Chainlink requires nodes run by individuals or companies to agree on the accuracy of the data before providing it for use by smart contracts.

By becoming a node operator, Coinbase is helping blockchain technology’s underlying infrastructure improve, according to Johann Eid, vice president of Go-To-Market at Chainlink Labs, the company that helps support Chainlink’s technology.

“How do you grow the space? You are expanding the infrastructure, said Eid Fortune. “That’s what they’ve been doing for years.”