What is Chainlink?
What is Chainlink?
Chainlink is a blockchain project that aims to build bridges between payment services like PayPal and Visa, banks like HSBC and Wells Fargo, and blockchains like Ethereum and Bitcoin. The project started in 2015 and ERC-20 LINK tokens were made available to the public during the ICO token sale in 2017.
Chainlink is a blockchain oracle platform that connects to real-world applications, data, and APIs. Chainlink was originally called SmartContract and was intended to bridge the gap between blockchain systems and legacy systems. On-chain processing consists of smart contracts with parameters specified in a Service Level Agreement (SLA). Oracle data is aggregated and verified to prevent tampering, and oracles are rewarded with LINK, which is Chainlink’s native token that operates on Ethereum.
Chainlink currently operates on the Ethereum blockchain and supports connectivity with other Ethereum applications. It will soon support more blockchains, as interoperability is at the heart of the entire project. Sergey Nazarov is the founder and he worked with SWIFT payment network on SWift Smart Oracle.
Oracle marketplaces like Chainlink and Augur combine real-world data with blockchain technology to open up new possibilities. Some believe it is the natural evolution of cryptocurrencies and smart contracts.
Cryptocurrency Market Performance of LINK . Token
LINK’s highest price to date is $1.28, which occurred on January 9, 2018. LINK has a total supply of 1,000,000,000 units.
The token price has steadily increased over the past few months (December 18 – January 19) and more than doubled as the rest of the market continues to decline in value.
Chainink’s ICO crowdsale took place in September 2017. At that time, 350 million LINK tokens were distributed, representing 35% of the total supply. Another 350 million will be distributed to node operators and the remaining 300 million (30%) is retained by the company for further development.
LINK is “mined” by selling off-chain services and data through an API connected to the Chainlink Network to become an oracle node.
LINK is traded on many exchanges such as Binance, Bitthumb, Huobi, CoinBene, Bitrue, Mercatox and OKEx. Over $10 million in LINK are traded daily and trading pairs include BTC, ETH, XRP and USDT.
As it currently exists as an ERC-20 token beta on the Ethereum blockchain, LINK is supported by any ERC20 compatible wallet, including MyEtherWallet and Nano hardware wallets like the Nano S.
This is subject to change at mainnet launch, as LINK will blend elements of custom standard ERC-20 and ERC-223 tokens.
Oracles can build a better blockchain
Blockchain interoperability is key to future success. Some blockchain projects solve this problem with main and secondary chains, while others use sidechains. In contrast, Chainlink uses oracle, which acts as an agent to verify real-world data and prepares the data to be recorded in a smart contract on the blockchain.
Smart contracts initiate this based on specific criteria, such as payment transfers or price movements. When the threshold is reached, the block processed by the network of oracle nodes reaches the group consensus.
Oracle’s reputation is built by handling transactions, and reputation is a factor in being selected as an SLA. The process of selecting oracles, collecting and presenting data, and then verifying among oracles as on-chain smart contract processing happens on Chainlink.
This means that everything from investment market data to bank account balances, commodity purchases, election results… is recorded in a digital ledger.
In fact, anyone with an API can connect it to Chainlink to start earning LINKs based on the use of this data.
Because it is designed to run API queries based on smart contract SLAs, Chainlink’s potential use cases are endless. Of course, no one knew how well it worked until the mainnet came out.
Link with Chainlink
Connecting to keep things together is only useful when there are things that need to be connected. Chainlink needs businesses to buy the network and be successful. As mentioned at the beginning of this article, the largest partner by far is the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
The SWIFT network is used by retailers to verify account balances for retail card transactions. When you swipe your card to buy something and it’s approved or declined, the SWIFT network is what transmits that data.
Chainlink is not the only partner of the SWIFT blockchain, but this announcement gives hope to the project as the mainnet is finally coming. Visa, Discover, MasterCard, and American Express are all connected to SWIFT, so it’s not an exclusive partnership. Instead, it is one of many gateway certifications needed to serve the financial industry.
Chainlink’s other partners are Zepelin_os, a smart contract development operating system called Request Network and an upcoming exchange platform. They also partnered with Project Accord – a smart legal contract platform and Bodhi – a prediction market that was initially launched on Qtum.
The more partnerships, the stronger the network will become, and the more cryptocurrencies, exchanges, and legacy technology projects to connect.
Even organizations building their own blockchain can use Chainlink to connect with their other proprietary platforms.
Chainlink hopes to link all other blockchains and technologies. Using the oracle node to connect external APIs to the blockchain enables the connection of data, finance, and other platforms. Chainlink currently exists as a beta on the Ethereum blockchain, and its success depends on how these major pieces work in the mainnet.
- Oracle can be built from any API to create node. Node operators are rewarded with LINK for providing data and services offchain.
- Chainlink partnered with the SWIFT network to integrate payments into its blockchain platform. SWIFT connects more than 11,000 businesses worldwide.
- Chainlink is currently in beta, so no functionality (and LINK tokens) has been verified.
If the mainnet delivers the promised functionality then it will be a lean and robust blockchain. Chainlink doesn’t have to be an Ethereum killer because the more cryptocurrencies and blockchains in existence, the more useful Chainlink is theoretically.
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