Chainlink- The Blockchain Bridge
- Tanishq Wadhwani
- May 21, 2021
- 4 min read
Twitter: Chainlink provides the largest collection of decentralized services powering the world’s hybrid smart contracts.
Chainlink lets you connect your smart contract to the outside world. Its decentralized oracle network provides reliable, tamper-proof inputs and outputs for complex smart contracts on any blockchain. It is an industry-standard oracle network. Chainlink greatly expands the capabilities of smart contracts by enabling access to real-world data and off-chain computation while maintaining the security and reliability guarantees inherent to blockchain technology.
It enables creating a future powered by hybrid smart contracts thus building an economically fair world for everyone. A cryptographically enforced system of contracts will take both our daily lives and the world’s emerging markets into a new age of economic fairness, transparency and efficiency—one driven less by vague brand promises and more by the real value created by individuals and institutions. Through a fusion of principled academic research, together with an industry focus on user needs, Chainlink Labs’ mission is to empower the next generation of smart contracts. They believe and I agree that hybrid smart contracts will become the dominant form of digital agreement.
What Is Chainlink (LINK)?
Founded in 2017, Chainlink is a blockchain abstraction layer that enables universally connected smart contracts. Through a decentralized oracle network, Chainlink allows blockchains to securely interact with external data feeds, events and payment methods, providing the critical off-chain information needed by complex smart contracts to become the dominant form of digital agreement.
The Chainlink Network is driven by a large open-source community of data providers, node operators, smart contract developers, researchers, security auditors and more. The company focuses on ensuring that decentralized participation is guaranteed for all node operators and users looking to contribute to the network.
Who Are the Founders of Chainlink?
Sergey Nazarov is a co-founder and CEO at Chainlink Labs. He graduated with a degree in business administration from New York University, with a focus on philosophy and administration. His professional career began as a teaching fellow at NYU Stern School of Business. In 2009, Nazarov co-founded ExistLocal, a peer-to-peer marketplace for authentic local experiences.
In 2014, he also co-founded CryptaMail, a completely decentralized, blockchain-based email service. In 2014, Nazarov teamed up with Steve Ellis and launched SmartContract, a platform that brings smart contracts to life by connecting them to external data and widely accepted bank payments. SmartContract was one of the entrepreneurial ventures that led Sergey Nazarov to the founding of Chainlink.
Steve Ellis graduated with a degree in computer science from New York University in 2010. Right after graduating, he became a software engineer at Pivotal Labs. In 2014, he co-founded the Secure Asset Exchange, a company facilitating easy web access to a decentralized asset exchange.
What Makes Chainlink Unique?
Chainlink is one of the first networks to allow the integration of off-chain data into smart contracts. With many trusted partners, Chainlink is one of the major players in the data processing field. Due to the integration of off-chain data, Chainlink has attracted the attention of numerous trusted data providers, including Brave New Coin, Alpha Vantage and Huobi. Data providers can sell access to data directly to Chainlink, thus monetizing the information they have.
As a decentralized network, Chainlink allows users to become node operators and earn revenue by running critical data infrastructure required for blockchains’ success. Chainlink uses a large collection of node operators to collectively power a wide range of decentralized Price Feed oracle networks live in-production, which currently secure billions in value for leading DeFi applications like Synthetix, Aave, yEarn and more.
How Many Chainlink (LINK) Coins Are There in Circulation?
During the initial coin offering (ICO) for LINK, Chainlink announced a total and maximum supply of 1,000,000,000 LINK tokens. The current supply is about 419,009,556 LINK tokens, or about 42% of the total supply.
According to the ICO documentation, 35% of the total token supply will go towards node operators and the incentivization of the ecosystem. Another 35% of LINK tokens were distributed during public sale events. Lastly, the remaining 30% of the total token supply was directed towards the company for the continued development of the Chainlink ecosystem and network.
How Is the Chainlink Network Secured?
As an Ethereum-based ERC-20 token, Chainlink is secured by the proof-of-stake (PoS) consensus mechanism. Unlike the proof-of-work (PoW) consensus utilized by Bitocin, PoS relies on the amount of staked tokens for selecting node validators.
PoS protocols were created with the idea to battle the vast power consumption required by PoW systems. PoS models are becoming increasingly popular as they need less electrical power and are easily scalable. While PoW has proven itself a reliable consensus mechanism, Ethereum and all other ERC-20 tokens have been growing rapidly and setting the trend in the space.
Summary
Chainlink is a tokenized oracle network that provides price and events data collected from on-chain and real-world sources. Launched in 2017 by Sergey Nazarov, Chainlink aims to offer a solution to the “oracle problem,” or the ability to get the off-chain data needed to operate many blockchain-based smart contracts. The token incentivizes participants to provide and use this data. Chainlink does not operate its own blockchain. Instead, the token protocol is blockchain agnostic and can run on many different blockchains simultaneously.
It is a decentralized oracle network and cryptocurrency that provides real-world data to blockchains. It bridges the gap between smart contracts, like the ones on Ethereum, and data outside of it. Blockchains themselves do not have the ability to connect to outside applications in a trusted manner. Chainlink’s decentralized oracles allow smart contracts to communicate with outside data so that the contracts can be executed based on data that Ethereum itself cannot connect to. It is one of the main sources of data used to feed information to applications in decentralized finance.
Chainlink’s blog details a number of use cases for its system. One of the many use cases that are explained would be to monitor water supplies for pollution or illegal syphoning going on in certain cities. Sensors could be set up to monitor corporate consumption, water tables, and the levels of local bodies of water. A Chainlink oracle could track this data and feed it directly into a smart contract. The smart contract could be set up to execute fines, release flood warnings to cities, or invoice companies using too much of a city's water with the incoming data from the oracle.
References
Comments