What is a Blockchain?
To understand this topic, it’s essential first to define the term “blockchain.” In the simplest form, a blockchain is a digital record generated immutably. As the name suggests, it’s made up of blocks of data digitally chained together to form a chain. It functions across a distributed network of computers called nodes, which help secure and update it through a consensus mechanism. Transactions are simultaneously stored across each node as events happen. Block records are only updated after the verification and consensus of multiple nodes within the chain. Blockchain networks are decentralized since they eliminate intermediaries such as government authorities in their operations. This characteristic, alongside their distributed nature, immutability, and transparency, makes them trustless and highly secure. They are famous for pioneering the development of cryptocurrencies such as Bitcoin, Ethereum, and Litecoin. On the other hand, they can also be used for many different functions, such as securely storing data, managing supply chains, and even in the health sector.
What is an API?
Now that you have basic blockchain technology knowledge let’s talk about APIs. They are software facilitating communication between two applications using pre-defined and authorized protocols. By providing contact and common communication language between systems, APIs allow seamless data flow and interoperability. APIs can be used to request data from other websites or apps and enable scripts to run on third-party platforms. Developers use them to save time while programming and improving general user experience. Instead of creating new software, they acquire application programming interfaces and build on them. In Web2, the weather app on your smartphone is an example of an API. It interacts with the central bureau in the cloud system and pulls for you data about the weather of the day.
So what are Blockchain APIs? Application programming interfaces perform the same functions of sharing data and allowing interoperability in crypto networks. It would be too costly and impractical for every Web3 developer to build their network from scratch. Blockchain APIs hence help them make programs that can interact with network nodes of third-party services. This plays a pivotal role in reducing industry entry barriers and expediting the innovation of new products. Keep reading for a deeper understanding.
How do APIs work?
Let’s not dive into the working mechanisms of APIs. For starters, most of them sit between Blockchain applications and web servers. For example, if you are building a website or application that uses a specific part of the Ethereum blockchain, you will need to embed the network’s API in your site. You can then place an API call, typically a request for the blockchain to do something, and it will be done and transmitted for a response. This can happen occasionally, or it can be something continuous like the display of data, which will require ongoing communication between servers. For example, Web3 developers use APIs to display real-time price feeds on their apps and websites and offer payment solutions like crypto wallets without having to code them from scratch.
Best Blockchain APIs
There are tens or perhaps hundreds of blockchain APIs, and new ones are still being created. Some developers tend to have a hard time finding the best ones, which could be really time-consuming. Here are the best APIs for blockchain programmers.
Features & Benefits of Blockchain APIs
- Unified System: APIs ensure speedy and efficient communication between blockchains, creating seamless functionality. Through this, developers can give their users a better experience with little to no disruption and timeouts.
- System Security: All blockchain APIs transmit data in an encrypted format. Besides, the network and API endpoints verify data before transmission and receipt to ensure each transaction is safe and reliable.
- Collaboration: Blockchain application programming interfaces work with third-party platforms through cooperation. Although owned by different sources, sufficient permission is granted through features such as API keys to facilitate frictionless deployment.
- Trustlessness: Trust is a vital building block of all blockchain networks. API functionality is driven by the same principle too. The network safeguards transactions and sensitive data, such as private keys, through a system of distributed nodes.
- Powerful Management: Blockchain technology continuously tracks all API activities and highlights inconsistencies. As a result, inefficiencies can be detected and resolved quickly.
Blockchain API Use Cases
APIs have multiple use cases in the blockchain sector. Here are some of the common ones:
- Data collection and storage: These platforms can be essential for data collection and management. They can help collect and organize important data such as transaction addresses, block heights, and IDs.
- Payment API: Developers can use different APIs, such as the BitPay API, to manage virtual currency payments. They can integrate these services into their programs to offer secure payment solutions to their end users.
- Smart Contracts: Smart contracts have become integral in today’s blockchain applications with the rise in the popularity of Web3. Smart Contract APIs are self-executing and can automate complex processes in a smart way. They require minimal supervision once deployed. Chain API is a good example.
- Crypto Trading: APIs can be created to promote derivative and spot trading by retrieving live market data and displaying it or presenting it in charts. Advanced ones can also facilitate algorithmic trading.
Challenge: The Oracle Problem
Second-generation network APIs suffer from the “oracle problem.” It is an issue of interoperability, where blockchains are inherently limited from sharing data with external ecosystems. This makes them isolated networks like an island or a computer with all functionalities but no internet. For smart contract networks like Ethereum to fulfill their goals wholesomely, they need to interact and push or pull data from external nodes. For example, trade-related smart contracts might need digital signatures and authorizations to determine when to make payments, yet none of this information is generated within the network. On the other hand, this independent blockchain function guarantees network security. It also makes the systems reliable, as consensus only happens with information already generated internally. For the mass adoption of such networks, overcoming the oracle problem is essential. Currently, it can be bypassed through first-party oracles. Instead of off-market solutions, developers can use the oracles owned by the APIs.
What to Consider in Finding the Best Blockchain API
There are some key factors you must look for while selecting the best blockchain API. They include technology, compatibility, and performance. Let’s look at them individually.
Blockchain APIs come with different technologies, including programming languages, libraries, and architectures. Open-source platforms are considered the safest by developers. The one thing that makes them safe is their accessibility and the fact that many developers can go through them and find errors to be corrected. This is a crucial component to look for in an API before using it.
The API you choose should have a broad compatibility with coins. Bitcoin is the most popular crypto, followed by Ethereum, so they are widely supported. However, with the ever-growing number of virtual currencies, you want a solution that supports a diverse range of tokens, including privacy coins like Monero and stablecoins like Tether.
Blockchain APIs have different capacities. Similarly, your project has the minimum performance level required for efficient functioning. Therefore, ensure the solution you go for matches your minimum required capacity. In terms of speed, some centralized APIs are much better. However, you can find a balance between a moderate pace and other features such as high security.
Finding the best blockchain API can be challenging, but not anymore for you. We hope the blockchain API listed in this article will be useful for you. You can be sure we selected the best of tens of options available online. Remember, you are free to find more alternatives online now that you know what standards to go for. Remember to scrutinize factors such as compatibility and capacity while selecting your favorite ones.
A blockchain API is an infrastructure layer intended to help developers simplify their programming tasks by offering simplified solutions. For example, instead of game developers building a crypto wallet from scratch, they can deploy wallet APIs.
Like crypto wallets or any other blockchain solution, APIs are only compatible with specific virtual currencies pre-authorized during development. That is why it’s essential to check which coins a platform is compatible with before using it.
Different developers set their own pricing structures for APIs. Some are free, while others are not. Free ones mostly come with limits, such as a maximum number of daily requests and accounts per network. So you might need to dig into your pocket to subscribe to premium platforms to get the best features.