All right, this is my good deed for the year. Once I’ve posted my spiel, I’ll respond to any questions about operating a node, how to professionally contact API providers, and how to professionally negotiate with API providers. I WILL NOT respond to any posts that seem like empty FUD of pic related, and I WILL NOT respond to shills of pic related.
Now, I’m going to break down my investment thesis and try to intelligently discuss the pros and the cons. For the last 48 hours this board has been overrun with some of the most blatant coordinated FUD I’ve seen in a good long while, and the compensation to that FUD from the team has been just as annoying. But, in fairness, one of the two obnoxious parties might (depending of a few key factors) make me a significant amount of money.
I’ll start by saying this: my node is going to be better than your node. I’ve spent the last six months directly contacting API providers. I’m miles ahead of you all. When I see community members flying to Europe to attend Chainlink events, I say “that’s cute,” and then book my own flight to Berlin – except I’m going to the API conference. I’m eyeing a position at Google to write technical documentation for their APIs. I have multiple smart contract businesses in the works, all of which will rely on specific data sources that, at mainnet launch, I and I alone will be providing across multiple nodes. I intend to outstrip you all in building reputation and monetizing my node. Aside from steak house user and whaleanon – both of whom I *think* I know – there’s simply not many people better prepared for mainnet than me. There’s more people in the community than some realize (and they’re often quiet), but I would be shocked if there’s a half dozen node operators in the same spot I am.
I’m coming to you now because I am comfortable, and because it’s time for you all to start catching up.
Here are some things you should know about the API market: >>
API providers ARE NOT YOUR FRIENDS. Take a minute to browse a few dozen pricing pages. Most run on a Freemium model, and once you get over the free calls at any real scale, you’re a goddamn guppy in shark waters.
They’re essentially built on exploiting entrepreneurs – specifically, app developers. They give hungry young guns a difficult choice: you can pay a lower per-month fee and higher per-call rates, or you can pay an exorbitant monthly fee with low per-call rates. This sounds like simple business practices until you actually look at the damn ratios: per-call between the basic and premium plans routinely range between 4-10x, and I’ve seen as high as 20x. They have their high-volume clients, but they mostly have young dudes trying to get something started, and they shake those guys DOWN.
And once you go over your monthly allotment? Then they come for your blood. “Oh, you didn’t anticipate these charges? But it’s all in your contract. Perhaps you would like to upgrade?” It’s like selling you a lemon because they know you’re going to buy a real car later.
THEN you add in the SLAs. Uptime guarantees are only given to premium subscriptions. You know what a functioning node needs? Uptime guarantees. Now, I’m not saying that they PURPOSEFULLY hit lower subscription tiers with downtime, but you know what’s a highly unregulated industry? APIs. Nodes NEED to negotiate their own rate with an uptime SLA, or they’re screwed.
When I’m working on my smart contract projects, I spend most of my time trying to get these fucks to give me a pricing model that won’t make me bleed from the goddamn eyes. “Data is the new oil” – goddamn right, and these fuckers are TYCOONS. Don’t fuck with API providers.
But the predatory pricing isn’t even the worst part.
Most of these providers won’t even GIVE YOU ACCESS TO THE DATA. I started off trying to contact every sports provider I could because I thought I was going to be the first node to enable gambling, and I was going to build rep and corner the high-value contracts.
My model is still roughly the same, but it sure as shit won’t be in sports. This isn’t to say that it’s impossible to get access to those providers, but I’ve noticed that you run into certain… invisible barriers. I couldn’t even get a call from anyone with the NBA, NFL, NHL, or any American sport data provider. When you start poking around available APIs, you realize that there’s a cottage industry of folks offering things like odds, predictions, and analysis data – it’s because the big boys don’t give entrepreneurs the REAL goods. No American sports gambling on smart contracts for at least 3-4 years.
Even in the industry I’m targeting it can be rough. I finally got someone on the phone, had a great half-hour talk and got them excited about working with me, and then they acted all cagey for four months. After countless back-and-forth e-mails, the sales rep finally admitted to me that I should expect to wait a whole fucking lot longer. He told me it takes half a year to let a UNIVERSITY RESEARCHER access their data, and even then only with significant legal protections. I don’t know how much paper I’ve signed already. For many of these people, their data is their lifeblood, and they protect it zealously.
THE MACRO CONDITIONS OF THE API LANDSCAPE COULD NOT POSSIBLY BE MORE HOSTILE TO THE LAUNCH OF CHAINLINK. Their CTO laid this out a little bit in the discord a few days back, and I was surprised when he did. It’s the most potent FUD of Chainlink that there is.
Nodes are useless without data. Without hundreds of nodes serving data, the network is similarly useless. But the data is behind SIGNIFICANT walls of access and cost. At mainnet, there will be hundreds of little pieces of hobby software doing absolutely nothing – and then a few, like mine, quietly humming away.
> But muh behind-the-scenes something something ISO 20022
Lol. There will be a few big announcements at launch and hopefully the data associated with those companies/contracts will be affordable, but by the looks of it they won’t be. Yeah, we’ve heard for months that Chainlink is working with providers. But look at the folks THEY’VE ACTUALLY SIGNED. BnC follows these pricing models. Data Sports Group follows these pricing models. On their end, they think this is GREAT – new guppies.
Sergay is literally betraying us as you copypaste shit
Jaxson Baker
Once you start to realize that the only data that will be used is “data affordably available to a large swath of the node community,” you realize that the only data that will be used AT ALL is what’s free and what They offer. Think about that for a minute. What’s available right now? Fiews’ list, and Their list. That’s it.
So, what contracts will developers write? Ones using Their data. What data will nodes need to get access to if they want in on the action? The data providers They signed. People don’t realize that They don’t have “first mover advantage” in the traditional sense. They are creating the damn earth that will be moved. As of right now, there are no providers available to nodes in almost a dozen industries that They represent. They will FUNDAMENTALLY shape the marketplace. In many ways, They WILL BE the marketplace.
You want to compete with them as an individual node operator? You need to go out and find TWO data sources for EVERY use case, get gutted by the APIs like a pig, and then have MULTIPLE NODES on MULTIPLE PLATFORMS (or a community of your own) that can provide the data. No matter how you feel about Them, you’re going to sign up because it’s the only thing that makes sense.
Depending on the announcements/partnerships that drop on mainnet, I see them easily cornering 25-50% of ALL traffic on the ENTIRE network. If that seems absurd, answer this: what else is there? What else WILL THERE BE? There is a GAPING HOLE between Mainnet and Lambo, and it’s one that they fill.
Again, there’s only a handful of people who understand how useless the network is/will be in the early days without the damn data providers. Maybe half of those people are Them. Or, hell, I don’t know, maybe even some of Their team doesn’t get how crucial They are, and only the CTO gets it.
I’ll be keeping half my stack of Their tokens for those dividends, which I expect to become significant in short order. But half I’m investing as a pure spec play.
One of my buddies trades Uranium companies. Itty bitty miners on wild swings. A 2% move in the underlying asset, uranium spot prices, can lead to a 30% face-rip in the companies. He does maybe one trade a month, but knows how to spot them.
Similarly, during Bitcoin’s last bull (20x), an asset-backed derivative, GBTC, did a 1000x. It became significantly more valuable relative to the underlying assets due to scarcity of the shares and exposure. And, of course, we all just saw Linkpool do something similar. They are my big trade for the year. LP had their big multiple happen over hints of a working product and nothing else, as far as I could see. They are offering a second round of funding in 2020 when there will be a working mainnet and a working product. If they capture the traffic share I expect them to, I don’t even want to tell you what I think the multiple could be. I’m not crazy – it’s under three figures – but only just.
Its a copy pasta. OP is a moron and didn't realize the FUD he copy pasta'ed was obsolete and prior to mainnet. Lmao. I've seen this before long time ago
Angel Brown
So, there’s my thesis. Half of my investment is actually in the company, which I think will be the spine of the early network. The concerns about the lack of moat are valid, but not when you consider that they have a kind of first-mover on steroids.
People also underestimate the amount of business acumen involved on their team. Think about BnC. One of the few providers we know are going to be working with Chainlink, and one of the few providers advertising as such (check their Twitter this morning). They managed to convince BnC to TAKE LESS MONEY. BnC would LOVE to keep node operators as individual, atomized agents trying to negotiate on their own behalf. But, then They stepped in and got the community a deal. Nobody seems to get how foundational that will come to be.
But I do want two things from them:
1. The valuation. They need to respond to the community on this one. Even the folks who aren’t rabid FUDsters have called them out.
2. Show me the code. I’m more bullish on Them than most (signing BnC before Chainlink even announced was big and really made me come around to them), but I’m not putting down anything until I see how the STO will function.
The smartest of you know that my thesis isn’t the real public service, however. My good deed is a wake-up call. You all need to GET TO WORK.
Connor Howard
This is fucking hilarious. As soon as competitors that are x1000 better like Uni, the link shills get told to flood this board.
Its not a shill retard. I woudn't expect a UNI faggot to actually read anything though
Alexander Robinson
I’m five steps ahead of all of you, but without some help – even with Them doing some heavy lifting – the network will be useless. You all need to be going out and signing deals with your providers. You can just sign up for Their service and make a little bank, but if you’re not getting your own, you won’t REALLY make it. I have two industries good and cornered, and I have plans to run nodes on multiple hosts to provide that data. When the time comes (when I’ve built the reputation for the high-value contracts) I’ll open up what I have and make myself a competitor to Them. You all should be doing the same. It’s time to stop hunting for breadcrumbs, and it’s time to start doing the work to make this network run. PSA over.
If you're not technically savvy, find someone to help you. Best practices will be Fiews for EaaS, CLC (i'll drop the Them schtick, fair critique) for API access, and if you can do those two things, just put your faith in Linkpool. But honestly, unless Linkpool uses CLC's APIs, they're just hobby nodes.
If you're REALLY smart, though, you need to go out and sign your own damn APIs. Corner your own little slice of the marketshare.
If you can't do ANY OF THAT, sure, hold Link, it will accumulate if everything goes smoothly. CLC tokens are a significantly better spec play however, and have significant long term value as well. They do need to address the issues I mentioned, however!
i mean public staking available on mainnet. You wont be able to run a public node when staking comes live, staking wont be public and it will be on a testnet.
Also UNI is a DEX governance token and LINK is an oracle provider. God this board is fucking hopeless
Sebastian Taylor
Bro just give it up Its pasta I've seen this already I've been here since late 2017. You obviously copy pasted these the responses were less than 30 seconds apart anyway regardless for the fact I know it is pasta
Jason Young
So now tell me what exactly makes this obsolete AFTER the mainnet launch ? What is the difference between pre-mainnet and post-mainnet as we see today ?? Sorry but those 35 nodes you see on the mainnet are not public oracle API providing nodes as a final working product - see in the whitepaper
Mason Taylor
uni is not a competitor. its a governance token for the most popular dex. LINK is the de facto oracle provider.
Robert Howard
>Bro just give it up 4 (irrelevant) posts by this ID
Doesn't matter if pasta from 2017 or 18 or 19 or if pasta not you literal faggot, the fundamentals and principles are still the same
Samuel Jones
if not pasta user how would you rate vrf and providing random numbers? you'd only have to worry about uptime
Jordan Sanchez
someone explain what this means to me with my 100 linkies in terms a retard can understand
>CLC tokens are a significantly better spec play Fuck off Timo you tranny loving faggot
Lincoln Moore
It depends on who you are and what you want to do. I'm beginning to think about it in tiers.
Tier 0 is just holding Chainlink without the intention of doing anything by way of generating revenue. This renders the token entirely as a spec play, and while I guess this has the potential to make significant money, it ultimately strikes me as short-sighted. It's the worst of many possible options. Yes, you’ll get a return, but all the other options will let you make SO MUCH MORE. You can do this with any number of Links.
Tier 1 is just signing up for Linkpool. This will enable your links to generate revenue, but you're freely giving a huge portion of the revenue away. There's also the risk that they won't have any useful API access at the launch of the network, and that their famously conservative projections will come true. Unless they make a deal with CLC, I just don't see the nodes they run generating traffic. Look at the free adapters right now... there's not much functionality there. You can do this with any number of Links within their restrictions.
Tier 2 is running your own node with the assistance of various services. I think even people who aren’t technically savvy can set up their own node, get EaaS, and sign up for CLC's adapters easy enough, and that will enable you to run a highly profitable node with little per-month fees and other costs. I would HIGHLY recommend people considering this route to look into mining consultancies, however. I spent an afternoon and got a much better deal than Fiews with a much more complex setup for VERY cheap. CLC’s APIs still useful in this instance. Find someone willing to work with you, and keep your eye out for new services (I'd be surprised if my guy doesn't launch his own, cheaper service soon). You can also do this with any number of Links.
Isaiah Davis
Been working towards this already. I’ve spent the last 5 years or so obsessing over 1 thing and that’s getting meetings with any c-suite executive and their team. I’ve also closed millions in the SaaS world so this is an exciting opportunity.
I’m not technical enough to run a node, so I’ll try to provide leads to these operators and get a slice of the pie, for now. Thanks for the heads up - give me some throwaway email if you ever need help on this front.
Nathan Brown
But to answer your question I would place it somewhere in between Tier 0 and Tier 1. Its still better to provide something for the network but i do not think it will be the major revenue generator since its obviously providing a low effort node operation without too much to stake.
Jaxon Murphy
Good old 2017 pasta. Read between the lines
David Baker
*18
Grayson Thompson
Thanks for the write up. I've run a miner before but haven't done any of the things you mentioned and besides owning plenty of link I very out of my depth and fearful of losing my stinkies. When Thomas, Sergey, and Ari talk about "economic incentives" what are they referring to? How do you feel about Chainlink labs and what do you think the second white paper will cover?
Easton Nelson
And by low effort i mean - set up a node within a 10min tutorial - stake what is needed and you are ready to go - the problem is the amount of stake required for the whole network. I would say something like "buy a GPU and mine" - higher the investment, higher the profit, but the problem is that there is basically no ceiling in the mining investment and noone know the investment needed for the VRF operation. Only the decentralized nature of the network will figure this out
Isaac Lee
Tier 3 is the same as tier 2, but the node operator going out and finding their own API providers and corner their little slice of the market. I think this is how to really make it in the long term. In order to do this well, you need at least two providers giving the same type of data (in order to ensure that it’s end-to-end secure), multiple nodes on multiple hosting services so you can pitch it as decentralized on the oracle level (again, all about the optics), and you’ll need enough Link backing each node to build rep and handle collateral obligations. I’m guessing that the number necessary to do this well is closer to 60k between three or four nodes.
I really, REALLY don’t understand tier 0, however. If you’re just going to make a pure spec play, buy the derivative asset with the significantly higher upside. Again, compare bitcoin to GBTC during the bull. Throw some bones at the spec play at least.
Aaron Taylor
The idea that you "corner a slice of the market" is strange considering people may want to deploy a contract with n nodes sourcing data. Is it possible to corner the market in a decentralized network? I thought everything would be listed on a marketplace and contract creators will be able to pick and choose nodes and data sources and everything else they require
Connor Thomas
Can attest to this. Mapbox was a bitch to deal with.
