According to Gartner, organizations that implement blockchain computation and smart contracts have a better chance of improving overall data quality by about 50% and visibility by 30% by the end of 2023. However, the corresponding improvement in data quality doesn’t come automatically – you’ll need an API gateway tool to facilitate seamless payload delivery between blockchain smart contracts and other connected applications.
While the core functionality of an archetypal application programming interface is to enable easy and secure retrieval of blockchain data for smart contract actions, an API gateway checks whether data from external sources is formatted correctly. Technically, API Gateway services verify the Merkle tree proof, signature, and metadata of the payload. In addition, edge microservices can also enable data transformation between popular formats such as XML and JSON.
But there are many use cases for edge microservices as gateways to blockchain smart contracts. Keep reading to learn more, including the challenges of implementation.
API Gateway Use Cases for Blockchain Smart Contracts
API software integration provides a secure, centralized and user-friendly way to interact with blockchain smart contracts. This can help to more efficiently execute complex on-chain processes and transactions in a myriad of use cases, including:
Decentralized Applications (DApps)
Decentralized applications take advantage of self-executing protocols to run autonomously on the blockchain network. In other words, the application runs on a peer-to-peer network of nodes rather than on a single computer. To access the utilities provided by DApps, users send transactions to smart contracts to enforce their execution without the involvement of an intermediary, saving time and money.
Here, an API integrator can act as a link between DApp smart contracts and external services. This approach ensures that smart contracts adhere to predefined protocols or endpoints while involving external applications to execute their terms and conditions.
supply chain management
Supply chain management became easier once the industry started using blockchain smart contracts, allowing everyone on the network to track the movement of their products. Furthermore, recording all transactions on a shared ledger increases supply chain visibility for all parties. This translates into a business environment of trust, traceability and accountability throughout the chain.
Nevertheless, the management of the supply chain will be much smoother if the input data is consistent. A microservices API gateway allows supply chain managers to implement data validation rules and input parameters in smart contracts. This ensures that all input data is constantly verified and formatted for greater accuracy.
digital identity verification
Self-executing protocols on the blockchain can be applied to digital identity management to streamline verification. For example, businesses can use this approach to optimize KYC processes through automation, where user data is stored on-chain rather than in a centralized repository. It addresses various challenges including identity theft and transparency concerns.
But how can this process be accelerated? A website API integration for digital identity verification can provide a secure authentication protocol to ensure that only legitimate users can access the KYC smart contract. This can be through OAuth or any other security authentication protocol that works for a particular business.
Blockchain smart contracts are inherently built to automate transaction execution after meeting set terms and conditions of the on-chain agreement. To ensure a conflict-free process, the software program requires users to input immutable data before adding contracts on-chain, where it verifies that conditions have been met before starting a transaction.
Here fintech companies can use an internal API gateway as a transaction management tool. The API ensures that all transactions are carefully recorded on the distributed ledger and executed within set parameters. For example, it provides an interface for all parties to sign and verify transactions. It also facilitates seamless transaction fee management on the part of the service provider.
Blockchain solutions help the healthcare industry store and share patient information across emergency response teams such as hospitals, pharmaceuticals, laboratories, and local service providers. In addition to promoting greater data security, blockchain-powered medical applications can help doctors track patient information to identify critical conditions and respond quickly.
However, it can be implemented more efficiently with an API open-source tool that has an analytics and reporting dashboard. This will allow medical teams to monitor patient activities recorded on smart contracts and generate insightful reports to track progress.
Implementing API Gateway for Smart Contracts
In general, implementing innovative API gateway services like Tyk Technologies gives you a standardized interface for interacting with blockchain smart contracts. Here’s how you can implement API data integration in six steps:
- Define your app or website API integration endpoints for your smart contracts to interact with third-party resources.
- Leverage a framework and programming language of choice to set up edge microservices as a middleware layer of integration with existing applications.
- Use a blockchain client library like Web3.js to connect API Gateway to the distributed ledger system.
- Define parameters and protocols for integration React API Gateway to trigger smart contract execution.
- Set up security and access control on the interface using authentication and encryption techniques.
- Test and deploy your API integrations to make sure they work as expected.
Overall, edge microservices play an important role in integrating blockchain smart contracts with peer-to-peer networks. In addition to providing a critical standardized interface, API gateway tools promote a security posture of integration through authentication, encryption, and user access control. In addition, these tools also come with scalability features such as caching and load balancing to increase the efficiency of smart contracts when handling large-scale requests.
Challenges of Implementing API Gateway for Blockchain Smart Contracts
Implementing a data integration API as a gateway to blockchain smart contracts can be a daunting task for the uninitiated. Challenges you may face include the following:
- Complexity: Blockchain self-executing agreements are generally too complex to code, let alone understand. This can make it difficult to interact with them for the first time.
- Interoperability: Different blockchain networks run on different protocols and consensus mechanisms. This means that you may need to standardize your API Gateway for multi-chain functionality.
- Display: Poor integration or incompatibilities can slow performance, which can result in delays or a poor user experience.
- legacy system: Some businesses are still running on legacy systems, an approach that may require specific systems or the entirety of the IT infrastructure before API gateway integration can be implemented.
Study the matter
Examples of API edge microservices that provide utility gateways for blockchain smart contracts include:
- chain link, An oracle-based network that uses an API gateway to connect smart contracts with off-chain data from third-party sources. This allows developers to build data-driven DApps with real-time data insights within the network.
- infura, A customizable API gateway allows users to easily and securely interact with smart contracts running on Ethereum or IPFS nodes. This solution is mainly used for the deployment of decentralized applications.
- coinbase, The platform provides an API gateway that allows applications to connect to decentralized finance features such as trading, buying, selling, and web3 wallet management.
wrapping it up
From a neutral perspective, an API gateway can become an effective gateway for blockchain-centric smart contracts by providing a secure and standardized interface for on-chain interaction with external services. However, efficiency and user experience ultimately depend on various API features, such as integration functions, performance, security, interoperability, or even API gateway value.