Discover the Chainlink project ($LINK)

Come on, we’re off again for a new crypto discovery, this time with a project that’s been pretty well established for years: Chainlink . In this new article in the series, I will tell you about a project that revolves around data, why it is important and how it works.

You can find previous articles in the series here: Sandbox (gaming/NFT), Harmony (Layer 1 blockchain) and Dusk Network (privacy).

Project display

Chainlink is an idea that has been in the works since 2014 (officially launched on the Ethereum network in May 2019) and is the first to offer  a system of decentralized oracles , i.e. it will bring given from external services if the smart-contract of a blockchain needs it. Based on Ethereum, Chainlink is compatible with all networks: Cosmos, Tezos, Polkadot… 

To simplify, most of the time a smart-contract performs various predetermined actions on its blockchain (on-chain). However, there is sometimes a need for data that is not known in advance and/or is found off-chain. This may concern the result of upcoming elections, the score of a sporting match, the weather on a specific day, the price of an asset at time T, carrying out an audit or fund monitoring at intervals regular, etc. All things that cannot be established or guessed when writing the contract (divination … oracle … you will have found the report).

The idea is therefore to predict the different scenarios and activate the right cursors according to the result obtained at the desired time from a panel of trusted sites. This is where the many Chainlink oracles that offer these datasets come in. Each oracle has its own batch of data which is pooled and then consolidated and used to provide the final result. So we have a kind of consensus from several sources rather than just one, it also allows to create contracts with several parameters or to decide on certain criteria in the choice of oracles to be queried. All published autonomously and immutably on the blockchain.

Source: coincentral.com

For this to work, the input of information cannot come from a single source. Why? Because it would then rely on a centralized source of data, which goes against the very nature of blockchain technology. Customers can also note the different oracles used and in some cases they can be financially penalized in the event of dishonesty (false data, etc.) which should ultimately make it possible to have an increasingly reliable information network at the over time.

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Decentralization, trusted nodes, premium data and proof of security , all in order to provide a service of public interest on all channels, in other words, it was quickly seen as a nugget and became the reference of its domain.

The LINK token

The $LINK is the native token of the blockchain, it is used to pay transaction fees during purchases/sales, to generate interest (staking). But it is mainly used as currency to pay the oracles offering the data streams. These same operators must have LINK to launch their node on the network.

Technical point of view LINK is an ERC677 token on Ethereum (quite similar to the classic ERC20 token). To store your tokens, I recommend (as always) a cold wallet compatible with ERC20 tokens. This is the case for Ledger or Trezor. You can also place them in a Metamask , XDEFI or Trust Wallet type wallet.

Why is Chainlink an interesting project?

Like Dusk Network, they use zero-knowledge proof technology to allow users to prove that information is true to a blockchain oracle without revealing sensitive information. Many crypto projects already use the Chainlink network, such as the decentralized finance sites Aave, SushiSwap, Compound, Synthetix, Loopring or Google Cloud, Fantom and Crypto.com among dozens of others.

The options are limitless (DeFi, insurance, NFT , telephony, business world, etc.) since it is possible to offer almost any type of data as long as they have an APY to communicate with the blockchain. So if you are a data provider, you can monetize your information there. Simply by becoming an oracle of the network, you can make your content available and set an access price. Recently, the major American weather site AccuWeather became a partner in the project in order to provide a lot of meteorological data.

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The blockchain model needs a secure bridge that links real-world data to that of crypto. Chainlink has a place of choice, but is not the only one, because competitors exist: API3, MakerDAO, Band Protocol or more recently Umbrella Network… even certain institutional services which develop their own internal oracle (Coinbase is an example).

Where to buy LINK?

Given its seniority and its success, you can buy LINK on almost all the big crypto platforms and a good part of the small ones. 

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