The vitality and importance of the blockchain is no longer a secret. It’s clear that decentralized, trust-less records of data and transactions have a vital role to play in our shared future. However, there is still a real world, moving in all its chaotic enormity, out there. Off-chain happenings, what most people call “the real world”, are still the main fulcrum of life. For the moment at least.
What Are Oracles?
For smart contracts to ever have widespread applications, they need to be able to harvest data from the real world, whether that be the weather, who won Sunday’s football match, or whether a merger or takeover happened. In order to move off-chain data into a blockchain ecosystem, you need an Oracle. An Oracle is a piece of “middleware” software that translates any off-chain data into something computable on the blockchain. In order for smart contracts to truly begin to govern important facets of everyday life, this is essential.
What Are Chainlink’s Oracles?
Chainlink is a decentralized Oracle network that aggregates data from a community of nodes to provide trustworthy, verifiable information to smart contracts. Chainlink’s decentralization means it overcomes the central point of weakness of relying on a single third party to supply information to the smart contract. If that third party is dishonest, or submits poor data by accident, then smart contracts that shouldn’t have executed will do so, and vice versa. This breaks down the fundamental value of smart contracts as a trusted and decentralized way to create agreements with multiple actors. A decentralized node network of Oracles overcomes this problem.
How Does Chainlink Work?
Chainlink works by asking its community of nodes to gather information for it whenever a smart contract-enabled blockchain requests data. This creates a Chainlink SLA (Service Level Agreement) contract. That contract then produces an order-matching contract based upon the order submitted by the contract on the blockchain. It then aggregates the data from the responding nodes.
During aggregation, the Chainlink protocol evaluates the veracity of the data submitted by checking both the provider’s history of truthful submissions, and against the data submitted by the other nodes who are fulfilling the order. It then disregards any that don’t match or, if the data is complex and not necessarily discrete in form, averages or aggregates the provided data to then give that information to the requesting smart contract on the blockchain, which can then act accordingly.
This procedure ensures that the Chainlink network is providing accurate, trustworthy information that isn’t a product of a single third-party. It means that the data can not be manipulated or provided dishonestly as the protocol would catch that and dismiss not only that set of data but further data from that oracle. By doing so, it builds a network of trusted oracles that are not controlled by any single party and thus real-world data can be migrated on-chain with the same level of veracity as you would expect from standard on-chain data.
What Does the LINK Token Do?
Chainlink’s token, LINK, is an ERC-20 token built on Ethereum. LINK is used to pay for services on the network. Smart contracts that want data from the outside world pay in LINK. As well as paying for services, LINK is required to be staked by oracles who wish to participate in the network. This helps ensure that oracles involved in the protocol have a vested interest in ensuring the data is accurate and correct. As an ERC-20 token, an ETH wallet is required to hold LINK.
Oracles are an essential part of the blockchain landscape. With no trusted way of bringing data on-chain, then blockchain communities as a whole become siloed within their own realm or open to the perils of single-actor malfeasance. Chainlink and its token LINK have a powerful first-mover advantage as a decentralized oracle, and there is every expectation that demand for its services will continue to grow in step with the wider blockchain-driven world.
Is LINK Hard to Get?
Getting cryptocurrencies, whether by purchasing or trading, can be a daunting prospect for beginners. This is particularly true for any cryptocurrency that isn’t Bitcoin or Ethereum – with Ethereum LINKs, also known as ERC-20 LINKs, such as LINK being a prime example.
If you are thinking about getting LINK then Numio is a great choice for handling your assets. Numio allows you to pay people using your stored LINK assets, as easily as if it were cash. If you are a bit more crypto savvy you can also trade and swap LINK at the touch of a button.
How can I get LINK?
There are multiple ways to get LINK on Numio. You can purchase LINK with your credit or debit card, you can trade it for other ERC-20 assets (up to 100x cheaper than other wallets), or you can receive it as a payment. Whatever way you choose you can be sure that you are always in full control of your LINK.