Chainlink is a platform that aims to solve an essential problem in the world of cryptocurrencies: reliable and secure communication between the data inside the blockchain and the information outside it.
This platform promotes the use of smart contracts, which are understood as a type of technology that helps people exchange digital assets without intermediaries or third parties.
What makes these contracts "smart" is the ability for the terms to be set and executed as code present on a (blockchain), rather than on a piece of paper on a lawyer's desk with hard-to-understand legal terms.
Having clarity on what a smart contractis, understanding a platform like chainlink will be much easier. It allows connecting smart contracts to external resources or data through different networks, such as bank account payments, databases or web APIs, in order to make them useful in the business world. It is worth clarifying that this does not refer to the data source itself, but to the layer that validates the external data source and links the information.
How was chainlink born?
Chainlink is a decentralized network created in June 2017 by the company SmartContract
Work on the project began in 2014, but it was until 2017 that Steve Ellis and Sergey Nazarov published the white paper, in which they described a decentralized oracle protocol that would run on top of the Ethereum network and the Binance smart chain.
In its Initial Coin Offer (ICO) or its IPO, it raised USD 32 million, with a total of one billion LINK tokens, it is the native token of the decentralized oracle network.
How does Chainlink work?
This platform has a network of nodes called Chainlink Nodes (CN). Its main function is to feed the smart contracts we mentioned above that work within the Ethereum network with data obtained from the world outside the blockchain.
In order to fulfill this function, Chainlink seeks that, through a consensus on the information obtained from many different nodes, the most reliable and secure data is obtained.
On the other hand, Chainlink proposes a dynamic of incentives as a data protection measure. In order to prevent manipulation or bad practices with the information obtained in the process. Thus, the objective is to compensate node operators to encourage them to provide correct information. In other words, the more reliable and accurate the result of the data obtained, the more valuable the economic compensation will be.
In the case of evidence of any kind of manipulation, a kind of sanction is envisaged for the node involved.
What is the difference between LINK and Chainlink?
Throughout this post we have mentioned two important concepts: Chailink and LINK; it is worth clarifying that they are not the same. Chainlink is the project created by the SmartContract company and LINK is the token introduced by the same company, for economic and transactional purposes.
Chainlink is a solution to receive large amounts of information quickly and securely, and is also available to many people and institutions looking for an alternative to access almost all types of financial information.
In spite of being so recent, it has a great technological structure that allows it to solve the requests that are required on a daily basis. It can be considered as a good ally for users, however, it is necessary to understand how its internal operation is in order to decide if it adapts to the needs.
Finally, at Spartan Hill we have employed Chainlink pricing feeds as the ideal solution to support in due course the construction of the DLYCOP token. Chainlink allowed us to set a consistent, accurate and secure value based on global market conditions, all in a decentralized and transparent manner, making this digital asset highly reliable for users.