Finance:Chainlink
Chainlink is a fully decentralized oracle network which links smart contracts written into a blockchain with data from outside their network.[1] Chainlink allows smart contracts to securely connect to external data sources, APIs, and payment systems, enabling the smart contracts to communicate with and gather data from sources outside the blockchain.
The network operates using an off-chain consensus mechanism consisting of oracle nodes which independently harvest responses to off-chain requests. The individual responses of each node are aggregated via a consensus mechanism into a global response, which is then fed back to the smart contract.[1]
A major component of the Chainlink network is its cryptocurrency Chainlink (LINK)[2], which serves as an incentive for the network's independent oracle node operators. The network utilizes LINK to pay node operators for services such as retrieving off-chain data, computation, and conversion of data into blockchain readable formats.[1] The token is also available as an asset on common cryptocurrency exchanges.[3]
Initially connected to the Ethereum network, Chainlink is expected to eventually support all major smart contract networks.[1]
Background
Smart contracts written into a blockchain cannot, by themselves, communicate with data which is off the blockchain that the smart contract is written into. In order to obtain the data that is necessary to properly execute the contract, an external data source is needed.
One option for providing smart contracts with external data would be through a centralized data source. However, this option leaves the data received by the smart contract vulnerable to hacking and manipulation, and does not solve the issue of needing to trust a centralized third party to properly execute the smart contract.
Another option for providing smart contracts with data is through an off-chain consensus mechanism, whereby multiple, independent "oracles" harvest the necessary data. Once the data requested by the smart contract is harvested by the numerous oracle nodes, the responses of each node are aggregated into a global response that the smart contract uses as its data source. As the oracle nodes are fully decentralized, the aggregated data is much more likely to be valid than if it came from a centralized source, as any manipulation would require simultaneously hacking into a vast number of separate oracle nodes.
Chainlink implements this fully decentralized oracle method, and allows for a network of separate oracle nodes that can feed data into smart contracts written into a blockchain.
History
Features
LINK cryptocurrency
The ChainLink network utilizes the LINK token** to pay ChainLink Node operators for the retrieval of data from off-chain data feeds, formatting of data into blockchain readable formats, off-chain computation, and uptime guarantees they provide as operators. In order for a smart contract on networks like Ethereum to use a ChainLink node, they will need to pay their chosen ChainLink Node Operator using LINK tokens, with prices being set by the node operator based on demand for the off-chain resource their ChainLink provides, and the supply of other similar resources. The LINK token is an ERC20 token, with the additional ERC223 “transfer and call” functionality of transfer(address,uint256,bytes), allowing tokens to be received and processed by contracts within a single transaction.[4]
The current circulating supply of the LINK token is 350,000,000 with a total supply of 1,000,000,000 tokens. A single decimal point of a link token is referred to as a "serger", or "sergers" in plural.
References
- ↑ 1.0 1.1 1.2 1.3 Ellis, Steve; Juels, Ari; Nazarov, Sergey (4 September 2017). ChainLink: A Decentralized Oracle Network. https://link.smartcontract.com/whitepaper.
- ↑ "Chainlink (LINK) price, charts, market cap, and other metrics" (in en). https://coinmarketcap.com/currencies/chainlink/.
- ↑ "Chainlink Price Chart (LINK) | Coinbase" (in en). https://www.coinbase.com/price/chainlink.
- ↑ https://link.smartcontract.com/whitepaper
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