The 20th century, the century in which we are living, is well known for its digital revolution. New inventions and innovative ideas have made our lives easier and digitalized. One of these innovative things is a “chainlink” which digitally facilitates online transactions.
What is a chainlink?
Before going to the concept of a chainlink, we need to know about some other technical terms like oracles, smart contracts and cryptocurrency.
Oracle can be termed as an “agent” which verifies real-world data or external data and then transfers the information to a blockchain so it can be used in a smart contract. Oracle is necessary because cannot access external data outside the range of their network.
b) Smart contract:
A smart contract is sort of a digital contract which facilitates, enforces or verifies performance of a contract digitally allowing online transaction without involving third parties. A smart contract uses cryptocurrency for its transactions.
A cryptocurrency can also be called as a digital currency for online transactions which is a digital asset working as a medium for safe financial transactions.
So, we can define chainlink as a decentralized oracle network which can connect smart contracts with the real or external world using the cryptocurrency. Due to its decentralized nature, it offers maximum security. We can say that a chainlink is used to provide safe connection between smart contract and external resources without the intervention of third party.
Chainlink was first developed by a company named as “smartcontract company”. The team consisted of 11 members along with 8 advisors. Some of the key members of this team are Sergey Nazarov, Steve Ellis, Dan Kochis, Andrew Miller and many more.
Components of a chainlink:
There are two key components of a chainlink:
When we talk about on-chain component then it further consists of three main contracts. It first selects an oracle, reports data and finally aggregates the results.
On the other hand, off-chain component chain link nodes and Ethereum network which provides relevant information to the chainlink network.
To put it simple, both the components of a chainlink network interact which each other to provide efficient and useful services.
Interesting things to know about chainlinks:
There are many interesting facts about a chainlink as it is becoming much popular in many fields of life like industrial, financial or business sectors of the world due to its efficiency. Some of these interesting facts are listed below,
- It’s a decentralized oracle network.
- Due to its decentralization, it’s one of the most secure ways for online transactions.
- It’s an interesting tool to ensure safe and reliable data inputs or outputs in a smart contract.
- Chainlink is one of the best ways to connect smart contract and real-world economy.
- Chainlink, being one of the best methods for a smart contract, provides a secure environment to connect a smart contract and other external events for achieving maximum efficiency.
- Chainlink provides the best way for delivering technical information.
- Chainlink is considered to solve many of the issues that Ethereum cannot by providing a chance retrieve the data off-chain.
- Chainlinks are mostly used by node operators. It is said that the node operators having greater number of links get big rewards.
Chainlink, due to its useful features, is becoming very popular now a days. You can read the Chainlink review 2020 to know more. It is expected that in near future it will be used by most of the world for smart contracts. Chainlink is very unique because of its efficient and unifying characteristics.