Chainlink Launches on Ethereum’s Blockchain Aiming for Reliable Smart Contract Development
On May 30, 2019, Chainlink announced on their official Medium blog that they have successfully launched their consensus on the Ethereum main net network. The announcement further states that the launch of its consensus on Ethereum is expected to improve smart contract development and functionality on the network. In this article, we will focus on the unique nature of smart contracts, the problems that smart contracts face and how the launch of Chainlink consensus on Ethereum will impact smart contract development.
Smart contracts are digital agreements that are extremely reliable by running them on a tamper-proof, deterministic and secure node on a blockchain. The report further states that,
“Smart contracts create an entirely new and game theoretically superior form of agreement which is deterministic and guaranteed in the correct execution of its contractual terms through cryptographic means.”
This extreme reliability of smart contracts allows agreements to be made on a whole new level of value and trustworthiness. These unique properties of smart contracts are the top priority for Chainlink as they aim to preserve the reliability and trustless nature of the digital agreements.
The Single Source Oracle
Smart contracts are programmed to give specific contractual agreements and will execute once an event occurs. Furthermore, they need to remain extremely reliable while they are reacting to proof of an agreement’s performance so that they retain their unique value of extreme reliability.
However, to accomplish the two functions successfully, smart contracts require data to be fed into the network. Herein comes the issue Chainlink will be solving. Smart contracts do not collect data needed on their own but rather rely on external data feeds from the real world or “off chain”.
Smart contracts cannot collect data off chain hence the need for an Oracle (Source: Chainlink)
The problem with relying on external sources of data to feed the blockchain is that oracles introduce the need for centralization and trust in the decentralized, trust-less world of blockchains. Furthermore, having only one external reference for data increases the chances of “single point of failure” risks. These problems affect the overall reliability of the smart contract as centralization of the data sources tightens.
Chainlink Network on the Ethereum Main Net
The long-awaited announcement by Chainlink finally came this Thursday confirming the platform will launch on the Ethereum network. Chainlink is set to provide a decentralized computing system that offers the users with a decentralized oracle with multiple external data sources. The network is run by independent node operators who collect the external data releasing the results into a single smart contract input.
Chainlink will provide multiple data sources for its oracle to avoid single point failure risks
The announcement further confirms Chainlink will focus on providing reliable market prices as the first task on Ethereum. The prices of various assets will be listed on the decentralized oracle providing true and un-manipulated data prices. One of the first key pairs to be launched on Ethereum is the ETH/USD pair which will be provided in a fully decentralized manner at both the data source and the blockchain middleware/oracle levels.
More information on the launch of Chainlink on the Ethereum blockchain can be found in this article.