What is Chainlink (LINK)

What is Chainlink (LINK)

By Roberto D. | CryptoFarm | 10 Jul 2019


ChainLink is a platform that attempts to bridge the gap between smart blockchain contracts and real-world applications, which often tend to be outside the blockchain.

Cryptocurrency uses "oracles", which find and verify real data and bring them into a chain to be integrated into smart contracts.

 

ChainLink development

ChainLink was developed by a company called SmartContract, founded in September 2014.

The core team behind the cryptocurrency involves two people, CEO Sergey Nazarov and CTO Steve Ellis. Sergey is a serial entrepreneur who became interested in the cryptic world in 2011, long before it became popular. Before starting SmartContract, he founded Secure Asset Exchange (an exchange network) and CryptoMail (a decentralized email service).

Steve Ellis, CTO, was one of the co-founders of SmartContract and collaborated with Sergey on Secure Asset Exchange. He also worked as a computer engineer at Pivotal Labs.

ChainLink's consulting team is also strong and includes Ari Juels, professor of Computer Science at Cornell Tech and co-director of IC3, Andrew Miller, who is also a consultant for ZCash and Tezos and Brian Lio, CEO of Smith + Crown, among others.

 

What are the advantages of ChainLink?

ChainLink technology. Because ChainLink works to bridge the gap between in-chain smart contracts and out-of-chain activities and data, it has two main architectural components: on-chain infrastructure and off-chain infrastructure.

The on-chain infrastructure consists of chain contracts distributed on the Ethereum blockchain. These are Oracle contracts, which process data requests from users who want to access out-of-chain data.
Users who want the data to exit the blockchain ecosystem submit an application contract to the ChainLink network, which in turn processes these requests in their contracts, which correspond to the user's contract with the oracs that are appropriate for the application .

The contracts include:

  • A reputation contract that checks the track of an oracle provider to verify its authenticity.
  • An order matching contract that records the user's contract contract on the network and takes offers from the responsible oracle suppliers.
  • An aggregating contact that accumulates data from the chosen oracles and balances them for an accurate result.


ChainLink chain functions follow a three-step process that uses the above contracts:
Oracle selection: the user contract contains an SLA (Service Level Agreement) which specifies the parameters and requirements for searching for user data, which may include Oracle's reputation, specifications of the data requested, number of resources required, etc. Users can use filters and search manually for available oracles. ChainLink also provides an automatic matching engine in which oracle makes an offer based on the SLA, when manual search is not feasible.
Data reporting: the chosen off-chain oracles execute the service contract mentioned in the user contract and transmit the data to the blockchain for the nodes in the chain to be processed.

Aggregation of results: an aggregation contract is used to collect the data sent by the Oracle and balances all the data to provide the user with accurate data. This step is necessary to ensure data integrity and prevent tampering.

User contracts have the option to apply a penalty for misconduct that the oracles would be required to pay.
The off-chain infrastructure consists of Oracle nodes connected to the Ethereum network, which collect the data requested by the user from off-chain resources. The data received is processed by ChainLink Core, the software that allows interaction between the off-chain infrastructure and the blockchain.
In exchange for their contribution to network collection and data transmission, the off-line oracle operators are compensated in the form of LINK, ChainLink native ERC20 token.

Furthermore, off-chain nodes allow developers to integrate external adapters; plugins that operators use to adapt other programs to their basic operations and perform secondary tasks to simplify data collection.

At the moment, ChainLink only interfaces with Smart Contracts on the Ethereum blockchain, but aims to work with more networks in the future.

To solve the problems associated with a centralized Oracle system that can be tampered with, ChainLink implements "source or oracle distribution", ie it uses multiple oracles to collect data for a single user contract, and these oracles, in turn, are provided for I use more resources for their data collection. This successfully guarantees the integrity of the platform and the accuracy of the data collected.

For additional protection, ChainLink uses a technology called Intel Software Guard Extensions (SGS), which creates an "enclave" in which some protected areas of memory cannot be modified. This keeps honest oracles even if they are managed by an owner with a conflict of interest in a contract.

 

How to buy and store ChainLink coins (LINK)

How to buy LINK. LINK, ChainLink's native ERC20 token is available in over 10 exchanges, which is quite surprising given that it is just a year old. The first exchanges include Binance, Huobi Gate.io, OKEx, Merkatox, etc. Most exchanges mainly accept Bitcoin and Ether, but some also take Tether, WETH and others.

LINK is unfortunately not available on any exchange that accepts legal currencies, but it is probably only a matter of time before an exchange begins to accept legal currencies for ChainLink tokens.

These are only platforms where you can buy or sell LINK tokens, but help is often needed to choose the right exchange. CoinSwitch, one of the best cryptocurrency exchanges around, will help you in this regard by displaying prices on the bags in which it is sold, all in one place. Supports over 140 coins and 45,000 cryptocurrency pairs. You can choose any pair you want with your LINK token, and CoinSwitch will help you decide the best one for you.

Moreover, with CoinSwitch it is not necessary to rely on the wallets of the bag from which you purchase. Instead, all transactions can take place to and from your private portfolios.

Or you can buy on coinbase (more easy)

 

LINK storage

Being on the Ethereum blockchain, FUEL can be stored in any wallet that supports Ethereum and other ERC20 tokens, which are quite numerous.

The hardware portfolios are the safest and Ledger Nano S and Trezor work for ERC20 tokens.

Exodus and Mist are desktop portfolios for which to store Ethereum and tokens on its blockchain. It is compatible with Windows, Linux and Mac operating systems.

Jaxx, another Ethereum wallet, works as a desktop wallet for Windows, Linux and Mac PCs, a mobile wallet for Android and iOS phones, as well as a Web portfolio through Chrome and Firefox extensions, making it one of the most versatile wallets in circulation.

MyEtherWallet is its most popular web portfolio and ETHAdress is one of the portfolios of paper that stores ERC20 tokens.

What is the future of ChainLink

Market Cap and Global Acceptance. ChainLink's ICO was held in September 2017, earning $ 32 million through the distribution of 350 million LINK tokens, which represent 35% of the total supply of 1 billion tokens.

The distribution of LINK tokens is as follows:

  • 350 million tokens (35%) sold in the crowd.
  • 350 million tokens (35%) would go to the node operators to incentivize the ChainLink ecosystem and the remaining 300 million tokens (30%) would go to the cryptocurrency development company.

 

What makes ChainLink different from other cryptocurrencies

ChainLink is the first (and currently the only) cryptocurrency that has attempted to bridge the gap between Smart Contracts limited to the blockchain ecosystem and the real world.

Smart Contracts were practically inaccessible to companies that did not intend to adopt blockchain technology (which includes the majority of them) and ChainLink solves this problem.

The "oracles" used by ChainLink exist at the moment, but they are all centralized, negating the purpose of decentralized intelligent contacts and blockchain technology. ChainLink makes the whole process decentralized and is the first cryptocurrency to have done so.

 

Should you invest in LINK?

ChainLink's high position in the capital cap ranking is a big point in its favor, although it has a rather low individual price.
Bringing the Smart Contract technology previously unavailable to real-world applications is a revolutionary idea and, with the growing popularity of the technology, it will surely prove extremely useful in the future. For investors to choose this currency over others that offer similar services, it is a question that will require investors to study their competitors carefully.

LINK tokens are used to run the ChainLink network and as a currency on the platform, which indicates that their value is likely to increase as the platform's popularity increases (or increases).

Tokens may seem interesting for a long-term investment and an opportunity in particular due to their low individual cost, which tends to have a positive psychological impact on the mass market.

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Roberto D.
Roberto D.

Born, and still living, in Italy. Passionate about cryptocurrencies since I discovered ethereum in 2016 https://linktr.ee/robertod


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