Blockchain tech is evolving constantly. If you are familiar with smart contracts, then by know you understand how the bridge from the real world and the blockchain is a necessary step to take things on to the next level.
However, it is important that this process isn’t reliant on a single, error prone person, gathering and feeding the blockchain or smart contract with what might or not be truthful data.
Enter Chainlink
Chainlink’s was created with a straightforward objective: to take off-chain data and allow smart contracts to read it. In other words, it aims at creating a network in which data providers (there known as Oracles) are able to provide with reliable data to a blockchain. The Oracles’ incentive here is simple: money.
The incentive is very much the same for node operators who are required to stake their money in order to become a trusted source of data and earn more money and reputation in the process. It is their locked-up money which incentivizes them to be truthful or they might end up losing it.
Chainlink is a decentralized network of oracles which provide data back and forth between what are off-chain sources to on-chain sources. This process allows for smart contracts to access information outside of the blockchain safely while, in turn, addressing known reliability issues simultaneously.
To put things into simple terms, Chainlink is replacing middlemen in several different areas with code and service level agreements.
This puts Chainlink in the driver’s seat in terms of connecting the blockchain industry and traditional businesses due to how efficient, transparent, and secure their processes are.
A quick example of Chainlink’s inner workings
If a smart contract is set to pay to whoever guessed the winner of Superbowl LV, the Chainlink algorithm would register a request matching it to a Service Level Agreement which, in turn, would feed it off-chain data.
However, before doing so, Chainlink automatically creates three other subcontracts: a reputation contract, a order matching contract, and an aggregating contract.
By doing so, Chainlink relies on trustable nodes to crosscheck the information retrieved as means of guaranteeing that it is in fact correct and, in the process dismisses all other incorrect, unreliable, and/or inaccurate sources.
Wrapping up
Chainlink’s native token, LINK, has now grown around 20 times its original 2017 ICO price of 0,20 USD, something which attests investor’s interest and the project’s reliability and commitment.
As around 45% of the token’s total supply is in circulation, the supply is limited, and more and more tokens are starting to get locked up, this non-inflationary token might make some very interesting moves in the future.
