Chainlink and its LINK coin: A starter’s guide
Decentralized technology may very well be the way of the future, as multiple industries are working to use blockchain into their space. However, there is one big problem standing in the way: moving current online data and information into the blockchain. Doing so manually would be tedious and time-consuming and this is where Chainlink comes in.
What is Chainlink?
Chainlink will allow off-chain data and information to link to the blockchain via smart contracts. It serves to be the middle-man between any off-chain data and powers the smart contracts that bring it to the blockchain.
Right now, smart contracts can only handle information on the blockchain. This could be a great way for businesses to plug their data into the blockchain without having to build their own.
Chainlink will be a decentralized network of oracles that work with blockchains like Ethereum, Bitcoin, and Hyperledger.
Chainlink Coin Price
As of this writing, the price of Chainlink, or a LINK coin, is USD 0.368100 or 0.00005303 in BTC and 0.00084262 ETH.
The Chainlink ICO went until September 19th, 2017 and ended at the price of USD 0.091. As of Sunday, March 18th, 2018 the price was USD 0.29 which yielded a 318% return on investment for ICO investors. Pre-sale prices were 3120 LINK per ETH, with crowd sale lowering to 2600 LINK per ETH.
Currently, the market cap is $128,835,000, which is a powerful number to achieve since the end of the ICO.
Chainlink: How it works and its key features
Before getting into the network, one must know that Chainlink runs via oracles. Oracles are essentially brokers that seek out data in the real world to then verify and bring onto the blockchain so it can be used in smart contracts.
Chainlink has two separate feature sets: On-chain and off-chain.
The on-chain feature set contains standard smart contracts based on the Ethereum network. These contracts are called Oracle contracts, and they handle the users’ requests for off-chain information. A user must request off-chain data by submitting a “user smart contract.” There are three steps to a user smart contract:
The reputation contract checks an oracle’s previous track record to make sure it is valid and trustworthy. Reputation, resources, data specifications, and more are searched through to validate an oracles worthiness. Once selected, the oracles transfer data to the blockchain, so on-chain nodes can process it.
Records the user’s order on the network and collects bids from the respective oracles.
Balances the data of the chosen oracles to gather the most accurate data. It does so by aggregating all of the data and averaging it out with an answer. This answer must be over a certain threshold for the data to be verified.
Currently, the Chainlink blockchain consists of nodes connected through the Ethereum network. In the future, however, Chainlink’s off-chain nodes will be blockchain agnostic so it can work with all smart contract networks.
The off-chain nodes collect the user contract requested data from the specified network’s API. Then, this data is run through Chainlink core, which is a primary node that allows for the off-chain network to interact with the Chainlink blockchain. The data is then sent to an on-chain oracle for aggregation.
Chainlink Coin: Use and utilities
Oracles are run by operators, similar to nodes on any blockchain network. These oracles are paid in LINK for providing their services. LINK is also used for paying data and payment providers alongside other network beneficiaries.
Chainlink: Platform and Technology
The Chainlink blockchain uses the Ethereum network for now, with off-chain oracles to verify information and achieve consensus. It uses a combination of on and off-chain technologies to bring data into the blockchain and use it for whatever the user may need it for.
Chainlink: Team and Founders
Currently, the Chainlink team only has two members, both of which are co-founders. The project was founded in 2017 by Sergey Nazarov and Steve Ellis.
Sergey is CEO and has an extensive background in the world of blockchain. He founded the Security Asset Exchange which was essentially a decentralized email service. Steve worked with Sergey on the Security Asset Exchange as well as in Pivotal Labs as a software engineer.
Otherwise, the Chainlink project has a team of advisors from the Ethereum foundation as well as some professors from Cornell and University of Illinois.
Because Chainlink is built with Ethereum compatibility, LINK can be stored in essentially any ERC-20 capable wallet. MyEtherWallet, MetaMask, or Ledger are great choices.
Chainlink: Can you mine LINK?
Chainlink cannot be mined. Instead, oracles are rewarded for providing their services to the Chainlink network.
Chainlink, unfortunately, does not have a roadmap available at this time.
Chainlink’s Twitter account is fairly non-active, with most information going into their Reddit subreddit or Telegram server, where they have 4,661 members. Medium is a great place for detailed breakdowns as well. News tends to be discussed on the subreddit with any additional talk on the Telegram server.
Chainlink: How to buy Chainlink
Because LINK is still new, it can only be bought on a few exchanges. Binance, Mercatox, Token Store, and Huobi are some of the more popular ones. There is no other way to buy LINK at this time.
Overall, Chainlink is a promising and even necessary technology to move blockchain technology forward. Utilizing oracles to bring off-chain information in is a streamlined way to get companies on board with decentralized technology. However, the company isn’t doing a good job marketing the project.
Just because it is well built, that doesn’t mean it will be successful. Especially if nobody knows about the project. Also, Chainlink is partnered up with a few other projects like SWIFT and ZeppelinOS. The success of the project requires them to rely on these third-parties however, which will cause an issue if one of them falls through.
Chainlink: Final thoughts
Ideally, Chainlink will be the solution for shifting off-chain information to the blockchain. That said, the technology is so new and relies on a few too many third-parties to be completely viable at this time. We will have to wait and see what the future holds for this project.