What is Chainlink (LINK)?
June 14th 2021
"Chainlink is the bridge between blockchains and real worlddata." -
What is Chainlink? How does it Work?
The problem: Blockchains are great for sharing data, transparency,and transacting value globally, instantly and securely. The problem with thisis that the data this blockchain transmits is often unaudited and must trustthe publisher that the data is true and correct. With blockchains promoting transparency and the ability to verify any transaction, the data that makes upthat transaction must also be verified: Enter Chainlink.
Chainlink greatly expands the capabilities of smart-contracts by enabling access to real-world data and off-chain computation whilemaintaining the security and reliability guarantees inherent to blockchaintechnology. Chainlink's decentralized oracle network provides reliable,tamper-proof inputs and outputs for complex smart contracts on any blockchain.
Reliable, tamper-proof network
Use decentralization, trusted nodes, premium data, and cryptographic proofs to connect highly accurate and available data/APIs to any smart contract, Chainlink is creating a rich environment for institutions, businesses and developers a platform to get real world data into their decentralized applications without compromising security, scability or trust.
Seamless connection to any API
Build on a flexible framework that can retrieve data fromany API, connect with your existing systems, and integrate with any blockchain, now and in the future. Chain supports many different markets of datafeeds which are all supported and supplied by decentralized nodes working together to provide true and accurate data to use to anyone utilizing the Chainlinkblockchain. Currently supported data-feeds available on Chainlink are:
- Cryptocurrency (ETH pairs) Data Feeds
- Cryptocurrency (USD pairs) Data Feeds
- Stablecoins Data Feeds
- Ethereum Gas Data Feeds
- Foreign Exchange Data Feeds
- Commodities Data Feeds
- Indexes Data Feeds
- Proof of Reserve Data Feeds
Additional data-feeds will continue to be added to Chainlink as more online businesses and defi platforms take in real-time data from different markets to build their applications.
For example: Previously, if you wanted to input a USD/GBP exchange rate into your app, you would need to take a price feed from a 3rd party website and custom integrate this API into your platform and also rely on the true rates being subscribed to you and your users. Any issues with the API, the platform feeding the data or the exchange itself could be compromised at any point in the data gathering progress which would effect the outcomes of a app's ecosystem and userbase. Not to mention, custom API endpoints would also need to be developed to bridge the gap between a standard RestAPI and whichever blockchain your app is developed on.
Taking the same data-feed from Chainlink, the USD/GBP data-feed would be taking from standard peice of API code similar to the code base of the blockchain you are already invested in using with the additional layer of verification that the USD/GBP rate your app is using has been verified by a number of unrelated, collaborating sources of verifiable truth.
Proven, time-tested solutions
Integrate battle-hardened and time-tested oracle solutions that secure billions of dollars in value for market-leading blockchain projects. With the growth of Crypto, Blockchain and now Decentralised Finance (DeFi), many projects are turning to trusted decentralised oracles such as Chainlink in order to ensure their datafeeds are correct and stable.
Transparent oracle computation
Independently monitor and verify Chainlink's open-source code, the performance of its oracle networks, and the quality of individualnode operators. With transparency and verification built in as standard, developers and businesses can build trust with Chainlink as a vendor and also a decentralised ecosystem of investors, developers, nodes and data-providers.
The open-source nature of Chainlink has enabled many startup ideas to blossum and scale fast by using reliable and verifiable real-world datafeeds in real-time without having to sacrifice usability or reliable data for their minimum viable product (MVP).
Smart contracts are inherently disconnected
Blockchains are highly secure and reliable networks for value exchange but lack the functionality to natively fetch external data or send data to off-chain systems in a manner that retains end-to-endtamper-resistance. Blockchains are essentially closed loop systems for transferring existing and created value on-chain, but can be difficult to import and introduce new usable datasets at scale.
Chainlinks interoperability to not only its own chain, but all other blockchains it works with, are creating the building blocks for the next financial markets evolution.
Chainlink connects smart contracts to the real world
Through the use of secure oracles, Chainlink extends thefunctionality of blockchains by connecting smart contracts to real-world data,events, payments, and more in a highly tamper-resistant and reliable manner.
Chainlink Price Feeds provide critical market data needed toissue, settle, and secure DeFi applicationsThe Chainlink Network supports a multitude of price feedslive in production, securing billions in value for many leading DeFiapplications, CeFi companies, and various other financial institutions.
Incorporate decentralized data inputs to provide your userswith superior guarantees about the execution of key services.
Connect to any blockchain
Use a single software to connect your existing systems to any current or future blockchain environment. Making a key decision early on in a business or development to invest into a single blockchain is something that takes long and careful planning. Only a handful of projects in the blockchain space are split across several chains and rely on a single centralised counter party to ensure parity of their business activities.
Chainlink's goal is to not only provide real world data feed but become an interoperability platform for blockchains to work together.
Learn more about Chainlink from the Chainlink website: https://chain.link/