Chainlink Introduction & Use Cases
by Dragan Djekov
What is Chainlink (LINK)?
A fintech company known as SmartContract Chainlink Limited SEZC is responsible for the crypto giant Chainlink, its blockchain technology, and the cryptocurrency LINK. The key people and creators are CEO, Sergey Nazarov, CTO, Steve Ellis, and co-founder Mark Oblad. Chainlink is currently number 23 in the world in terms of market cap value at nearly 8 billion US dollars. As of late March 2022, Chainlink is trading at a value of $16 US dollars per LINK token.
Cryptocurrencies are revolutionary in the aspect that they can provide the users to send and receive transactions quickly and effortlessly, especially those like Ethereum, which uses coded smart contracts that automatically carry out agreements between parties. But this doesn’t come without its own limitations, because blockchains like Ethereum lack the ability to incorporate data from the real world within the complex coded agreements. This is where Chainlink has been introduced to solve such a problem and fill in the void and bridge the gap using a network called the oracle network. Oracle networks, which are the base systems of joining APIs in the real world into smart contracts, integrate all kinds of diverse real-world data such as: price feeds, other blockchain tokens, supply chain management, web APIs, bank payments, scores from a sports game, backend systems, temperatures directly recorded from smart sensors, market data, retail payments and/or anything that is basically relevant to the given blockchain’s objective and goal.
Every Chainlink-powered transaction is super accelerated. In just over five minutes, it is able to process more than 20 confirmations, but because LINK is more than often utilized for operations of substantially sized capital transactions on the DeFi networks, assessing its capability for the day-to-day crypto users and transacting consumers cannot be applied at the moment.
Unlike its predecessor, Bitcoin, Chainlink relies on a proof of stake (PoS) protocol, which means there is no need for advanced cryptic miners required to solve computational puzzles to transact and process on the network. This plays a positive significance and influential reduction in the footprint that Chainlink leaves on the environment. One drawback of this protocol could simply be that anyone on the network validates block transactions or mines tokens based on how many tokens they have in their possession.
How Chainlink provides its data driven solutions
Chainlink incorporates simultaneously a multitude of blockchains because it doesn’t have or rely on a native blockchain. By using multiple blockchain sources, it is able to distribute to them all streams of constantly updated information. Since it also acts as an oracle aggregator, Chainlink buys valuable data from various information providers and then relays the computed data directly to the specified blockchains. Once it automatically matches the oracles with operators of a blockchain that are in need of real-world information, the oracles begin to work on acquiring the desired information from external streams and sources. That data is processed and routed through Chainlink’s blockchain after being assessed and aggregated as the most correct information is filtered and the rest is rejected. This prevents users from receiving irrelevant or unusable data for their purposes. Once the information is routed to the operator’s blockchain, it is integrated into the smart contracts so the contracts can update and adapt to the accurate input. If there’s market data on a specific token change, or there are fluctuations or alterations to specific interest rates, for example, the blockchain can then automatically update itself on those targets’ data through the oracle network system.
When information providers consistently give and provide truthful, correct data, they will maintain a positive reputation score. However, those who constantly offer up inaccurate information accrue a negative reputation score, which then concludes in them being removed completely from the Chainlink oracle network.
Chainlink’s team describes its technology as open-source and is expanded and advanced by a wide collective of users, developers, and researchers who, together, aim for Chainlink to be a positive public product where the whole blockchain ecosystem can benefit and grow from. The lucrative cryptocurrency project has a great following and has garnered a lot of popularity and support as a decentralized finance token. Its oracle network is able to lock in and secure smart contracts worth in total over billions of dollars throughout the DeFi network. The LINK token is best known for its cryptocurrency asset management, its smart contracts regarding borrowing and lending, its cryptocurrency derivatives, and its stable coins, which are coins backed by collateral required for those assets.
Google, Binance & many others use Chainlink
Chainlink was one of the forefathers to provide existing smart contracts with the valuable option of off-chain data integration. Because of this game-changer attribute that it holds over the competition in this blockchain niche, it has been able to build up a strongly respectable and recommended reputation. Chainlink has its cryptic claws in a vast amount of tech areas and is supported by high-level profiles within the crypto community. Brave New Coin, Alpha Vantage, Huobi, and others have begun to offer their information and data for purchase to Chainlink.
This project is clearly a problem solver in its ability to connect and expand upon the capabilities and possibilities of smart contracts by acquiring and incorporating real-world data and information off the blockchain while still providing and maintaining a reliable and secure transaction guarantee within blockchain technology and computation. Binance is presently utilizing the very capable oracle token, which makes Binance a part of the ecosystem of Chainlink, and in doing so, they are able to capitalize on the speed and the time saved for their own blockchain developers, who would have instead been required to tediously develop their own Smart Chain.
With the globally known corporate giant Google also acquiring access and integrating Chainlink’s technology services to develop hybrid blockchain applications on Google Cloud, it further expands Chainlink’s tech influence and real-world use case evidence as an innovative cryptocurrency to be highly aware of. Its ability to be quickly adopted and diversely implemented on a wide range of data-driven and financially-focused tasks in the fast transacting world gives it an edge over the rest of the DeFi tokens competing against it.
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