Chainlink——A Decentralized Oracle Network
- Chainlink Network (LINK) aims to provide tamper-proof inputs and outputs of data for smart contracts on any blockchain.
- An individual can receive on-chain and off-chain data by connecting his smart contracts to various data sources and third-party APIs. One can also send data to parties outside of the blockchain she uses via the Chainlink Network.
- Chainlink's Meta Oracle provides data aggregation and reaction services, which enables developers to further improve the functionalities of their smart contracts.
- The Chainlink token (LINK) is an ERC-677 token used as the payment for all services the Chainlink Network provides.
What is Chainlink?
Chainlink (LINK) is a decentralized oracle network which aims to connect smart contracts with data from the real world. Chainlink was developed by Sergey Nazarov, with Steve Ellis as the other co-founder.
Chainlink is to establish a secure link to connect real-world data with the blockchain system, aiming to solve an important problem in the world's blockchain field, that is, the problem of interaction between blockchain and external data.
Mainly include the following aspects:
- Established a distributed Oracle data network to interact with real world data
- Provides standardized solutions for many application scenarios, such as financial data transmission, financial agreements, insurance, etc.
- Able to perfectly integrate and seamlessly interact with services outside the blockchain, such as payment, contract execution, and any service that can be executed through API
LINK, the cryptocurrency native to the Chainlink decentralized oracle network, is used to pay node operators. Since the Chainlink network has a reputation system, node providers that have a large amount of LINK can be rewarded with larger contracts, while a failure to deliver accurate information results in a deduction of tokens. The LINK network is a decentralized oracle network; allowing anyone to safely provide smart contracts that access critical external data, off-chain payments and any other API functions. In addition to increasing decentralization through the network, the LINK token compensation system will also ensure accurate data. Since LINK tokens are used as the currency on the ChainLink platform, it also means that the more the ChainLink platform is used, the more valuable LINK tokens will be.
Sergey Nazarov is the co-founder and CEO of the company. He has worked in the blockchain space before, as the founder of Secure Asset Exchange, a ShapeShift like cryptocurrency exchange. He also founded the decentralized email service called CryptoMail.
Steve Ellis is the co-founder and CTO of the company who has worked previously on the Secure Asset Exchange platform. His experience as a software engineer in Pivotal Labs came before he made his debut in the blockchain industry.
Chainlink also has a great advisor team, including Ari Juels, who along with Nazarov and Ellis wrote the whitepaper of ChainLink. A computer science professor at Cornell Tech and the director of IC3. Andrew Miller, who has worked as an associate professor of computer science at the University of Illinois, is also an advisor to ChainLink. Hudson Jameson is another strong advisor on the team who is one of the prominent Ethereum developers.
How Chainlink Works?
The Chainlink network provides reliable tamper-proof input and output for complex smart contracts on any blockchain. This solves the problem of how to store information on the blockchain in a way that is still secure, trustworthy and decentralized.
Chainlink creates a decentralized node network to provide real-world data to and from the blockchain, which creates the critical infrastructure for smart contracts. This "blockchain middleware" means that Chainlink can provide essential off-chain information such as prices, event results, and links to traditional payment systems without sacrificing decentralization and security.
ChainLink works by connecting the blockchain ecosystem to external applications. On one end, it connects to the blockchain, and on the other, it is integrated with an API. The solution’s base is built on oracles, which help in limiting trust in a single party and work seamlessly in a decentralized infrastructure.
Smart contracts provide the ability to execute tamper-proof digital protocols. In order to maintain the overall reliability of smart contracts, the inputs and outputs that smart contracts rely on must also be secure. Chainlink can provide a reliable end-to-end external data connection for this. Chainlink allows developers to connect to any external API and easily connect smart contracts to the data sources and APIs they need to run. At the same time to realize payment anytime, anywhere, it could connect existing applications like PayPal with the Ethereum blockchain. It could also help users in sending payments directly from their smart contracts to their bank accounts.