Chainlink is a decentralised oracle service that connects the world of traditional financial services with blockchains. Chainlink provides a secure platform that works with smart contracts across blockchains. This in turn enables those smart contracts to access real world resources include bank payments, APIs and data feeds.
Chainlink is designed to provide a bridge between blockchains and traditional payment services and third-party data feeds. Chainlink sits on the Ethereum blockchain, allowing for connections with the Ethereum decentralised applications (dApps). To achieve this Chainlink uses oracles which act to verify data from the real world. Once verified it can be added via a smart contract onto the blockchain. To achieve this, Chainlink has two primary components to its architecture, these are the on-chain and off chain infrastructure. The on-chain infrastructure includes on-chain Oracle contracts which are deployed on the Ethereum blockchain. When a user requires data from outside of the blockchain they submit a request to the Chainlink network. This in turn puts these requests into its own contracts which are designed to match appropriate oracles with the user’s contract.
Chainlink was founded by CEO Sergey Nazarov and CTO Steve Ellis in 2015. Before founding Chainlink Nazarov was the founder of the decentralised email service CryptoMail and the decentralised Secure Exchange Network. Chainlinks’ CTO Steve Ellis was the co-founder of SmartContract. He also previously worked with Nazarov on the Secure Asset Exchange. 2017 the ERC-20 digital token called LINK was distributed during a public token sale. During the token sale a total of 350 million tokens were distributed. This account for 35% of the entire supply of LINK tokens.
The LINK token can be purchased from a number of different cryptocurrency exchanges. These cryptocurrency exchanges include:
- Coinbase Pro
Chainlink addresses some of the core problems with traditional smart contracts. To understand why this is the case it is useful to provide a little explanation of what smart contracts achieve. With a traditional contract the terms of that contract are enforced by law, a smart contract replaces this by using code. A smart contract will execute itself a particular set of circumstances are reached. These circumstances are predetermined by code. The benefit of this is that unlike with a traditional contract no third parties are required for the contract to execute. This creates both efficiencies and increased certainty.
The problem faced by smart contracts has been how to integrate real world events that occur off the blockchain into the contract. Chainlink solves this problem by using blockchain middleware known as an oracle. Oracles are agents which find and then verify real world data. For this service they are rewarded with LINK tokens. The real-world data that they provide triggers the execution of the smart contract when the conditions by that contract are reached.
The success of Chainlink will in large part be influenced by how successful the blockchain is with developing relationships with traditional players in the financial space in this regard it has already had one notable success by partnering with the Society for Worldwide Interbank Financial Telecommunications aka SWIFT. SWIFT is the network which is used to verify that funds are available when a retail payment occurs.
Chainlink can be sold from the cryptocurrency exchanges listed above. The LINK token can be directly traded for a number of major cryptocurrencies including BTC and ETH. In order to sell LINK tokens, you need to follow these steps:
- Open an account with one of the exchanges listed above
- Transfer LINK tokens to the exchange
- Trade the LINK token for BTC, ETH or one of the other major cryptocurrencies
- Transfer the BTC or ETH to a platform that enables the exchange into fiat currency such as USD or EUR
- Exchange the LINK token for fiat currency and then transfer the funds to a bank account