Chainlink is a decentralized oracle that plays an important role in the blockchain industry. It is used to pull data from outside sources and interact with different blockchains.
The platform is not a competitor to existing oracle providers but is instead viewed as a tool that can be incorporated into their smart contracts. It also offers a cryptocurrency token called LINK.
This platform was created by Sergey Nazarov and Santhosh Palaveshwaran in 2017, and it has been gaining popularity ever since.
This platform was created in 2014, but it wasn’t until 2017 that the Chainlink project became an actual company. The Chainlink whitepaper was released in February of 2017, and then later that year the platform (and LINK tokens) were officially launched.
Its founder, Sergey Nazarov, had previously worked on the team that created Ethereum. His partner Santhosh Palaveshwaran has experience working on several other blockchain projects.
Originally, Chainlink was intended to be used as a way to connect smart contracts and other blockchains. However, Chainlink is also compatible with other blockchain platforms and tools.
This means that Chainlink can be used in a number of different ways to improve blockchain technology.
The network also uses tokens (LINK) to make the Chainlink decentralized oracle network run smoothly.
Operators that use Chainlink to access APIs are rewarded with LINK tokens when they provide the correct data. Operators can also be paid in other cryptocurrencies, depending on chainlink’s current rate for that particular currency.
Why Is Chainlink Important
Chainlink is a very important blockchain technology to keep an eye on. It can be used in many different contexts, which means it has the potential to impact multiple industries around the world.
What Chainlink does is potentially useful for any business that wants to expand its functionality and interact with blockchain technology, but cannot afford or is unwilling to take on the risk of integrating a new chain.
This can include things like financial institutions, stock exchanges, and more. A Chainlink that uses smart contracts as a service (SCaaS) has the potential to give those companies an easy way to interact with multiple blockchains without having to do any extra work themselves.
In essence, Chainlink could allow companies to develop their own chainlinks that work for exactly what they want, without having to create the chainlink themselves.
Lastly, Chainlink can be used in conjunction with other blockchain technologies like IOTA and Ethereum. IOTA requires all nodes to maintain the network, which can make it more difficult for companies with limited resources or large numbers of users.
However, chainlink can ensure that IOTA has all the resources it needs to function properly.
Types of Chainlink Smart Contracts
There are many different types of Chainlink Smart Contracts. These include traditional cryptocurrency payments, escrow services, bank loans, and more.
Traditional Cryptocurrency Payments
The most basic Chainlink Smart Contract is one that simply acts as an intermediary between the blockchain and another payment system. This allows cryptocurrencies to act in ways they were not previously able to.
The platform also allows for smart contract escrow services. This means that if a third party is involved, Chainlink makes it so the smart contract only executes when both parties have met their obligations.
This can be used to help facilitate agreements between multiple people or organizations in various contexts, including employment contracts, business deals, and more.
Another type of Chainlink smart contract is a loan that comes with both interest and collateral. This means that the blockchain system never gives up ownership rights until the terms are met, at which point it can take back the collateral.
How Do Chainlinks Work
Chainlinks is made up of two parts: a node and an endpoint.
The node runs the Chainlink software, which collects data from API calls. The API call for each request must specify what engine it is using to gather data.
For example, if someone is creating a smart contract for an insurance company, they would specify the engine that pulls data related to weather patterns.
The second part is the endpoint. This represents the instance of a smart contract or another system that needs external data in order to operate. Each Chainlink uses an API key that is set up on the network, which allows nodes to access the API.
How to Buy Chainlink
The Chainlink cryptocurrency is called LINK. You can exchange it on cryptocurrency exchanges or you can pay through brokerage services.
You can also use bitcoin to purchase Chainlink cryptocurrency without having to pay any brokerage fees since chainlink is an ERC-20 token that runs on Ethereum blockchain.
Chainlink Current Price
The current price of LINK is $27.64 with a total market cap of $13,008,620,326.
These numbers will continue to fluctuate as time goes on. The important thing to remember is that Chainlink is only valuable if people use it to create smart contracts and connect blockchains together.
How to Mine Chainlink’s LINK
Many cryptocurrencies require miners to verify transactions, which typically results in part of the cryptocurrency being mined. However, Chainlink doesn’t function that way. Instead, it uses staking rather than mining to secure its network.
Basically, anyone who holds one or more LINK tokens can use their holding as a vote to support Chainlinks they would like to use. If Chainlinks get too many votes, then it will be used by the entire Chainlink market.
This means that Chainlink’s network is both decentralized and scalable.
Understanding Chainlink and what it can do is important to understand blockchain technology in general. This is a valuable part of the platform that makes smart contracts more useful, secure, and reliable.
Additionally, Chainlink allows cryptocurrencies to take on new functions without requiring much change to the underlying codebase.
Chainlinks decentralized oracle network also helps make blockchains less dependent on any one individual or organization.
This platform can be used in applications that range from escrow services to loan contracts, and the cryptocurrency is already valued at $27.64.
The network also has potential for many other future uses, especially when combined with blockchain technology.
About the Author
True Tamplin, BSc, CEPF®
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.