What is Chainlink?
Chainlink is a decentralized oracle network that provides real-world data to smart contracts on the blockchain.
LINK tokens are also digital asset tokens used to pay for services on the network.
Smart contracts are contracts programmed to execute when certain conditions are met and fulfilled. To date, smart contracts have been used for everything from creating new crypto-financial products to developing new crypto assets.
However, the ongoing problem is that most smart contracts have to rely on some type of external data source to properly execute their terms. For example, smart contracts that want to copy bonds or insurance contracts may need access to APIs or Internet of Things data that report on market prices.
Chainlink was created to address this problem by encouraging data providers (oracles) to act as a bridge between blockchain smart contracts and external data sources.
Each oracle in the Chainlink network is assigned a reputation point, so it is encouraged to provide accurate data. In addition, when node operators obey the rules of the software and provide useful data, they are rewarded with Chainlink’s cryptocurrency LINK. Chainlink is trying to support all blockchain-based smart contract networks as of 2020.
Who is the Creator of Chainlink?
The Chainlink network was launched by the nonprofit company SmartContract in June 2017, and its first version was released the same month.
The company’s co-founders Steve Ellis and Sergey Nazarov published Chainlink’s White Paper in September 2017 with company consultant Ari Juels. Chainlink team made the Initial coin offer (ICO) with this development. By selling 35% of the 1 billion unit supply of LINK cryptocurrency, they generated revenue equivalent to $ 32 million.
As for the rest of the tokens, 30% went to SmartContract to be used in the development of the Chainlink blockchain, and 35% was distributed to encourage node operators.
How Does Chainlink Work?
Chainlink breaks down the execution process into three different steps to facilitate communication between users and external data sources.
1-Oracle Choice: First, Chainlink users prepare a service level agreement (SLA) that specifies a set of desired data requirements. The software then uses this SLA to match the user with oracles that can provide the data. Once the parameters are set, the user submits the SLA and LINK deposits the cryptocurrency into an Order Matching contract that accepts offers from oracles.
2-Data Reporting: This is the step where oracles connect with external sources and obtain the real world data requested in the SLA. The data is then processed by the oracles and sent back to the contracts running on the Chainlink blockchain.
3- Results Gathering (Clustering): The final step involves disclosing the results of data capabilities collected and returned to a Collection contract. The collection agreement receives the responses, evaluates the validity of each, and returns a weighted score using the sum of all data received.
Why Does LINK Have Any Value?
LINK derives its cryptocurrency value from its ability to ensure successful execution of smart contracts connected to the Chainlink network.
Most importantly, LINK is built into the network itself and is the only currency available for key network operations. For example, LINK is used to pay node operators that provide the data. In this way, it also plays an important role in managing the interactions between Chainlink users.
LINK is also used as a deposit requested by smart contract creators and paid by oracles. This fee will be refunded as soon as their services are not accepted or the task is completed.
Smart contract creators charge this fee if an oracle fails to complete its side of the contract. Finally, the amount of LINK an oracle has is one of the factors that determines its reputation.
Like many other cryptocurrencies, the supply of LINK tokens is limited, meaning there will always be only 1 billion LINK according to the software’s rules.
Why Use LINK?
Chainlink may be of interest to developers who want to create blockchain-based financial products that need to access and review external data sources.
Also, if investors believe that the number of users for blockchain-based smart contracts will increase in the future, they may want to add LINK to their portfolio.
If Chainlink solves the underlying problems for smart contract users, it can become an important tool in combining blockchain technology with real-world applications.
Traing Beasts Chainlink Price Prediction 2021 – 2023
According to Trading Beasts’ Chainlink price forecast, the future price of LINK will remain constant throughout 2021 and