There is an inkling of buzz in the crypto world about Chainlink (LINK 1.51%), a former crypto darling from 2020 that like so much of the crypto world took a beating in 2022. Chainlink now has aspirations to lead the coming Web3 revolution, and it has found a prominent evangelist to help spread its message: former Google (now Alphabet) Chief Executive Officer Eric Schmidt.

Appearing at Chainlink's SmartCon conference in New York City, Eric Schmidt, who headed Google from 2001-2011 before becoming its executive chairman, led a fireside chat with Chainlink Labs co-founder Sergey Nazarov. Together, they discussed how Chainlink fits into the future of blockchain and crypto. Schmidt, who became an official strategic advisor to Chainlink in December 2021, thinks this potential breakout crypto has enormous potential when it comes to the Web3 revolution.

Oracles and smart contracts

That might be surprising to some, because many casual crypto investors probably have never heard of Chainlink. That's primarily because Chainlink is not a Layer 1 blockchain like Ethereum, Solana , Avalanche, or Cardano. Instead, Chainlink is a decentralized blockchain oracle network that feeds off-chain real-world data to on-chain smart contracts.

Analyst watching data trends on a blue computer screen.

Image source: Getty Images.

That basically means Chainlink takes data from external sources in the real world and then finds a way to deliver this data to blockchains in a timely and secure manner. Every data source is considered to be an "oracle." The most common data sources are asset prices, but you can also have oracles for just about anything, including weather data.

Until recently, Chainlink has primarily been used for decentralized finance (DeFi) because oracles are critical for being able to buy, sell, trade, and exchange digital assets without the need for an intermediary. Data simply gets sent to a smart contract, which can then be automatically executed.

A new growth strategy for Chainlink

One reason Chainlink added Eric Schmidt as an advisor was presumably to boost the profile of the crypto and add new tech partnerships. And that seems to be what's happening with Chainlink. The number of oracles at Chainlink is up 30% since January, and the number of projects using Chainlink has increased to over 1,000. Recent partners include Coinbase and the SWIFT payment network. The plan now is to scale Chainlink even further by offering premium data services.

The big idea is for Chainlink is to become "the AWS of Web3." Schmidt, a longtime veteran of the Web 2.0 world, is viewing Web3 (or Web 3.0, if you prefer) through much the same lens. As Schmidt sees it, there will be a few titanic giants of the Web3 world, and each of these will do one thing very well. Chainlink will function much like AWS, the B2B unit of Amazon, offering all kinds of infrastructure and data support for large enterprises. 

Hype vs. reality

Of course, as Schmidt cautioned during his fireside chat, there's still a lot that needs to be worked out in the blockchain and crypto world. For example, Schmidt says that smart contracts, in their current form, are "poor in their capabilities." And he thinks that all the buzz about Web3 "got a little ahead of reality." So it's not like Chainlink is going to become the AWS of Web3 overnight. 

From a marketing perspective, though, adding Web3 into the mix is smart. If you compare how Chainlink is describing itself now (as a Web3 crypto) versus how it described itself one year ago, the change is dramatic. Back when Chainlink brought Schmidt on as an advisor, its press release called Chainlink "a secret ingredient to unlocking the potential of smart contract platforms." That idea just wasn't big enough. 

Chainlink is a buy

Schmidt is obviously a smart guy. During his tenure at Google, he oversaw the launch of innovative products that you are probably still using today: Gmail, Google Maps, and Chrome. And, in the process, he became one of the 100 wealthiest people in the world. 

If he thinks that Chainlink will hit it big one day, I'm more than willing to ride his coattails. Even though Chainlink is down more than 85% from its all-time-high of $52.88, it is definitely one crypto that should be on your investment radar for 2023.