Chainlink (LINK)

Chainlink allows smart contracts to interact with the real world.

What is Real-World Data?

Chainlink has a decentralized community composed of data providers, nodes, auditors, developers and more. This community effectively reports and validates data and provides that information to smart contracts.

Real-world data can include things like weather, event and ticketing data, stock market data, payment data e.g. from Visa or Mastercard, and anything else.

How does Chainlink work?

You can make a bet with your friend that your favourite basketball team will win next week’s game. You create a smart contract that will execute once certain conditions are met. In this case, when the game ends and the winner is declared. A smart contract is better than just shaking hands because the winner is guaranteed to get paid. No one can interfere or delay payment.

However, the smart contract is computer code. It will not know who has won the game unless it is given the data it needs to execute. Simply inputting data into the smart contract from a centralized source such as ESPN is not reliable enough.

What if ESPN accidentally reports the wrong score? What if your friend hacks into ESPN and changes the winner, causing the smart contract to pay him instead?

The solution to this is Chainlink’s decentralized oracle network. Within this network, there are many global data providers all over the world verifying data and sending this data to the blockchain. Therefore, your smart contract is interacting with verified data from multiple sources. This is the power of decentralization.

What is Chainlink (LINK) token?

LINK is Chainlink’s token. It runs on the Ethereum blockchain. It has two main use cases:

1. Node operators are paid in LINK to provide real-world data for smart contracts.
2. Node operators make LINK deposits to show that they are available and comitted to providing accurate data.

Chainlink is the Future

The more demand there becomes for smart contracts, the more demand there will be for LINK. Right now, smart contracts are still pretty new and are not really used much in the real world.

It’s inevitable that smart contracts will be adopted in the future. Anything from buying houses to sports betting will use smart contracts. The more smart contract adoption, the greater demand there will be for Chainlink.