ChainLink (LINK) Review: A Closer Look At Ethereum Blockchain Oracle Project
Taking A Closer Look At ChainLink (LINK)
As many already know, the exploration of blockchain technology started with the launch of Ethereum. Until ETH came to be, blockchain was only seen as a single-purpose technology — something that is only there for managing cryptocurrencies. However, Ethereum brought dApps, smart contracts, and has opened the door to countless new use cases for this technology.
Of course, to make use of this technology, it needs to be connected to data and information that is mostly off-chain at this point. While this will likely change in the future, there is a real necessity for some kind of special effect in order to integrate accurate data into smart contracts while said data is off-chain.
This is where ChainLink comes in.
What Is ChainLink?
Simply put, ChainLink is a decentralized oracle network. It aims to connect the off-chain infrastructure with blockchain technology in order to allow us to use off-chain data on the blockchain. In other words, it acts as a bridge, or an agent, that will find and verify data in the real world, and then bring it to the blockchain, so that smart contracts can be made.
Other such oracles that are available today are still centralized, and have a single point of failure. In order to achieve its goal, ChainLink uses two components — the on-chain component, and the off-chain component.
1) ChainLink on-chain component
ChainLink's on-chain component consists of various contracts deployed on Ethereum's network. There are three main ones — a reputation contract, an aggregating contract, and the order-matching contract. These three contracts are processing all requests for accessing data that is off-chain.
Simply put, if a user wants to access some off-chain data, they are filing a requesting contract to ChainLink. ChainLink will process the contract into one of its own, and it sends it to an appropriate oracle.
When it comes to reputation contracts, these are the contracts that check an oracle's track record and confirm their authenticity. As for the order-matching contracts, they log requesting contract agreement on the network and collect bids provided by previously verified oracles. Finally, there are aggregating contracts, which compile data from chosen oracles and calculate the final result for the query.
There are three steps to the process — Oracle selection, data reporting (retrieving data from off-chain sources), and result aggregation (collecting the data provided by oracles and delivering the most accurate answer to the user).
2) ChainLink off-chain component
When it comes to the off-chain component of ChainLink, it is made out of a network of oracle nodes. All of these nodes are connected to Ethereum blockchain. They are in charge of collecting data from off-chain sources, processing it, and delivering that which is relevant to the users' request. All of these operations are paid in LINK, which is an ERC-20 token belonging to ChainLink.
In addition, off-chain nodes allow developers to include plugins used by operators in order to accommodate other programs and streamline the collection of data. Each request for information is met through the use of numerous oracles, while each oracle uses a different source for data collecting. That way, the collected data will be accurate and plentiful.
Details About ChainLink
ChainLink started in 2014 when it was created by a firm called SmartContract. It consists of business developers and engineers who are working on further developing the project and implementing new solutions when necessary.
ChainLink is live on Ropsten, an Ethereum-based testnet. Despite the fact that they have made some excellent progress in developing the network, ChainLink doesn't get very loud when it comes to their progress or activities such as partnerships and alike.
Despite the fact that the project has been live for some time now, progress was mostly slow due to the project's complexity. They have yet to launch their MainNet, which is something that the community is looking forward to. This area of the blockchain industry is unique, and as such, it needs to be handled with precision, which requires time.
As for the LINK token, it is used for paying node operators for data retrieval, data formatting, and uptime. There are 1 billion tokens in the total supply, with 350 million in circulation. The coin's current price is at $0.345771, and it can be purchased on Binance, Bithumb, Bkex, Huobi, and other exchanges.