While blockchain technology has the potential to disrupt industries, there are some fundamental shortcomings too of the technology which prevents it from achieving its full potential. A blockchain is like a digital accounting ledger running on algorithms. Each blockchain is a universe of its own, which means the possibilities of opportunities are unlimited. However, this poses the problem of lack of integration and interconnectedness. It is difficult for blockchains to interact with each other but also near-impossible for blockchains to connect with the real world. This is where projects like Band Protocol jumps in. They are an integral part of the blockchain infrastructure as they facilitate the connection between the real world and the digital world.
What is Band Protocol?
Band Protocol was created in 2019 by Soravis Srinawakoon, Sorawit Suriyakarn and Paul Nattapatsiri. It was originally launched on Ethereum’s blockchain but later migrated to its own blockchain designed through Cosmos.
Band Protocol is a decentralized oracle. Oracles are database management systems that allow the efficient transfer of data and information for online use. However, blockchains have had to make use of centralized oracle providers, which goes against the fundamental concept of decentralization of the technology. Hence, projects like Band Protocol (decentralized oracles) flooded into the market. The project uses blockchain technology to ensure the data transferred is completely accurate and reliable.
Band Protocol is essentially a blockchain-based software designed to incentivize users known as validators to provide real-world data to decentralized applications. It runs through smart contracts with the validators verifying data. Validators are also responsible for adding new transactions to the blockchain for which they, in return, earn BAND tokens as a reward. Validators are also chosen in terms of their BAND holdings.
While decentralized oracles are an integral part of the blockchain ecosystem, the market has been dominated by some projects. Chainlink is the most popular decentralized oracle used in the market. It is the sixteenth largest cryptocurrency. So, while the technology of Band Protocol is crucial, the project faces strong competition from other better-ranked cryptocurrencies. The future outlook of Band Protocol is not bleak, but it certainly is not as good as Chainlink.
However, nothing is certain in the crypto market. Band Protocol can very well overtake Chainlink in a matter of days if the development team can differentiate it from Chainlink in miraculous ways. But for now, BAND stands at a price level of $7.83. According to the estimates of Digital Coin Price, the cryptocurrency is expected to be operating at a price level of $11.13 by the end of 2021, while the five-year projection places it at $27.56.