One of the main problems in the Blockchain world is the limited interaction and lack of integration with data and payment systems from the real economy. As yet there is no large-scale and uniform ecosystem.
ChainLink offers a range of technical solutions that allow you to “upgrade” the capabilities of smart-contracts, giving you the opportunity to connect smart-contracts to data sources and any external APIs. It also provides the ability to send payments using smart-contracts to bank accounts and popular payment systems.
ChainLink has also developed “Oracles”; very important software that enables extended access to the Ethereum smart-contracts. Using “Oracles”, you can create programmable smart-contracts for payments between two parties after the implementation of certain agreements, and without intermediaries. These smart-contracts can replace any documentary agreements which require access to financial resources that exist outside the blockchain (off-chain).
Today, there is practically no interaction between various traditional payment systems and blockchain technology (cryptocurrencies). ChainLink “Oracles” enables smart-contracts to interact with data providers, banking organizations, and famous payment networks. ChainLink looks to be a solution for cryptocurrencies integrating into the banking sector and taking full advantage of smart-contracts in traditional economies.
ChainLink ICO and partnerships
The ChainLink (LINK) ICO took place in September 2017, with the project team raising $32 million. A portion of tokens was reserved for further development of the ChainLink network. During the ICO, 35% of the total token issue was sold. The maximum LINK that can be issued is 1,000,000,000.
The ICO was remembered by participants of the crypto community for confusing dates and changing the rules for participation at the last moment, due to an error in the program code.
The developers set a goal of implementing a whole network of Oracles that will be compatible with BTC, ETH, and other cryptocurrencies.
Initially, the project was built on the Ethereum blockchain, however ChainLink later began to support both Bitcoin and Hyperledger.
The creators of the project have established a partnership agreement with Swift, one of the largest payment messaging networks in the world, including around 11 thousand banks across the globe. This collaboration simplifies the use of smart contracts by these financial institutions. ChainLink also concluded an agreement with Google, Polkadot, Synthetix, IC3, Gartner, etc.
How does Chainlink work?
As already mentioned, ChainLink developers are seeking to expand and scale the possibilities of applying smart-contracts. The creators of the project want to provide the opportunity to use smart-contracts in main business areas.
Smart-contracts have great prospects for development: they save time, money, and human resources while also providing an opportunity to bypass standard bureaucracy.
The terms and requirements of the smart-contract are drawn up by both sides. Contract participants depend on the honest fulfillment of requirements. The time and terms of the agreements may change, with the compliance of both parties. There is no third party.
Working with smart-contracts implies a number of advantages for parties: they have the opportunity to discuss all details in advance, the transaction amount is reserved, and only when all conditions are fully met are funds transferred.
If the terms of the agreement are not met, the contract can be quickly and painlessly “broken”. The data recorded in the blockchain acts as a guarantor of immutability. The capabilities of smart-contracts can be expanded by providing them with external data.
Example: an investor signs a smart-contract. According to the terms, he will receive dividends if the stocks reach a certain rate. Without ChainLink's technical solutions, he would have to prove the fact of the stock’s growth and then wait for payment decisions to be made. A smart-contract makes a connection with the supplier of price data in the stock market through API integration and is able to extract and analyze the necessary data. This allows an investor to get his dividends quickly and without problems.
This also applies to work in many other areas, such as paying taxes at established tariffs, paying customs duties when confirming the fact of delivery of goods, etc. Using a decentralized network of “oracles” (servers that supply data), the necessary data from information sources is stored in the blockchain.
Сhainlink can integrate and receive data from IoT, as well as information on the movement of goods via GPS and ERP systems, etc.
What is LINK?
LINK cryptocurrency was created as a token on the Ethereum blockchain, allowing you to store your LINK on any wallet supporting Ethereum tokens (such as Guarda Wallet, for example).
ChainLink nodes are already deployed along with public blockchains. One of the main tasks of ChainLink is to ensure the decentralization of such nodes. The software creates the interaction of nodes with the blockchain, as well as with external services.
The ChainLink network uses the LINK token to pay ChainLink node operators for both the retrieval of data from off-chain data feeds, the formatting of data into blockchain-readable formats, off-chain computation, and uptime guarantees.
LINK token is an ERC20 token, with the additional ERC223 “transfer and call” functionality of transfer, allowing tokens to be received and processed by contracts within a single transaction.
LINK is used to pay data providers, site operators, payment providers, and other online service providers who deposit and transfer data to the blockchain. The more the ChainLink platform is used, the more valuable LINK tokens will become.
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