- Chainlink is the leading project when it comes to decentralized oracles for smart contracts
- The project’s technology allows smart contracts to access reliable off-chain data
- LINK is one of the most valuable tokens on the cryptocurrency market
Chainlink aims to provide a solution for the “oracle problem” faced by smart contract-enabled blockchain platforms. Smart contracts make it possible to execute code in a decentralized and trustless manner when pre-determined conditions are met. However, when smart contracts have to make use of real-world data such as the exchange rate between two different assets, an obvious problem arises. Even though the execution of the smart contract itself may be decentralized and trustless, the “oracles” which feed data to it can easily be manipulated or otherwise untrustworthy.
Chainlink are developing a framework that allows developers to build decentralized oracles that provide reliable data to smart contracts.
The origins of Chainlink
The origins of Chainlink date back to 2014, when a company called Smartcontract.com was established with the goal of providing products that connect data sources with blockchains. However, the products developed by Smartcontract.com were relying on centralized oracles, and the team opted to go with a different, more decentralized approach.
In September of 2017, the team behind Smartcontract.com launched their initial coin offering (ICO) for Chainlink, a decentralized oracle network. Thanks to the red-hot ICO market at the time, the team managed to hit their $32 million funding target, distributing 35% of LINK’s 1 billion total supply to investors in the ICO. The Chainlink mainnet was launched in June of 2019.
The CEO of Chainlink is Sergey Nazarov, and while he may not be as active on his social media accounts as some of the other prominent figures from the crypto and blockchain industry, he is generally seen as the face of Chainlink in the crypto community.
Basic Chainlink information:
- Decentralized oracle network
- Conducted an ICO in 2017, raising $32 million
- Mainnet was launched in June of 2019
- LINK tokens function on Ethereum through the ERC-677 standard
Chainlink makes it possible to establish decentralized oracle networks that provide inputs and outputs for smart contracts. These decentralzed oracle networks consist of multiple independent nodes, an agreed-upon method for collecting data, and external adaptors that provide access to APIs.
The LINK token functions on the Ethereum platform as an ERC-677 standard token. ERC-677 tokens retain all of the properties of ERC-20 tokens, but sport some additional features. LINK tokens are necessary for compensating node operators. Node operators also use their LINK tokens as collateral. In simplified terms – if they submit bad data, they lose the LINK tokens they had to put up as collateral.
How is LINK created?
The supply of the LINK token is capped at 1 billion and the token’s entire supply was pre-minted at launch. Here’s how LINK was initially distributed:
- 35% to ICO investors
- 35% reserved for network incentives
- 30% distributed to the parent company behind LINK
LINK’s entire supply is currently in circulation. You can track LINK transfers on an Ethereum explorer such as Etherscan.io.
Chainlink use cases
Chainlink’s technology can be leveraged in a variety of use cases. For example, decentralized finance protocols that require access to off-chain data such as the exchange rate between a cryptocurrency and a fiat currency can use Chainlink to access reliable price data.
Chainlink can also be used by smart contracts in finance, supply chain, payment applications, insurance and other applications. In short – whenever a smart contract requires reliable off-chain data, it can leverage Chainlink.
This data can come from price feeds, IoT sensors, randomness generators, biometrics sensors and a host of other sources.
Where to buy LINK and how to store it?
LINK is one of the most popular cryptocurrencies on the market today and is therefore accessible on many of the world’s leading cryptocurrency exchanges. If you already own some cryptocurrency such as Bitcoin, you can exchange it for LINK on Binance, OKEx, Huobi or other crypto-to-crypto exchanges.
If you want to acquire some LINK with fiat currency, you can buy LINK on Coinbase, Kraken or Bittrex.
Since LINK is an Ethereum-based token, you have plenty of options for storing it. Virtually all cryptocurrency wallets that support Ethereum-based tokens will also support Chainlink. Here’s a few of the best LINK wallets.
Before downloading and using any cryptocurrency wallet software, make sure that you are downloading it from a legitimate source and that the software is up to date!
If you want additional security for your LINK holdings, consider purchasing a hardware cryptocurrency wallet such as the Ledger Nano S.
ChainLink’s mission of delivering decentralized oracles for use in smart contracts could have a big impact on the real-world utility of blockchain technology. Opening up smart contracts to off-chain data sources could unlock numerous use cases, and we’re excited to see what the future has in store for ChainLink. It’s also interesting to note that there’s very few projects in the cryptocurrency and blockchain space that are trying to achieve the same goals as ChainLink, which puts the project in an uniquely dominant position.
Source link: https://coincodex.com/article/7820/what-is-chainlink-link-origins-tokenomics-use-cases-explained/