The topic of our review today will be the cryptocurrency Chainlink. It is one of the fastest-growing blockchain start-ups that has attracted the attention of many investors. The reason for its success is the intense popularity of the computer algorithm for smart contracts, which can safely be called one of humanity’s leading high-tech advances.
Chainlink is a high-tech blockchain platform powered by smart contracts. Oracle’s decentralized ChainLink service allows smart contracts to use Oracle’s internal blockchain services to interact with autonomous systems and APIs. In other words, oracles are middleware that provide access to external data for smart contracts. Chainlink significantly extends the capabilities of smart contracts by providing access to real data and off-network computation, while maintaining the security and reliability guarantees inherent in blockchain technology.
An overview of the Chainlink cryptocurrency begins with its origins. The developers were able to raise over $30 million in a small amount of time. Exactly at 5 p.m. on September 19, the CHainlink project was launched, but it functioned for a record-breakingly short period of just 10 minutes.
The company’s official website: https://chain.link
The problem was that investors were given the wrong information initially. The policy of the cryptocurrency’s founder, Tokensale, was also heavily criticized. In order to participate, it was necessary to register with Schainlink and deposit 100 Etherium coins.
Once investors received an email explaining in detail how to proceed, some of the addresses were simply unavailable. Some participants still think they were cheated, however, as it turned out later, this misunderstanding was related to a bug in the code. As soon as the error was fixed, the director of the project, Sergey Nazarov, said that the token sale had been completed.
The LINK platform is based on the Ethereum blockchain (ETH) and serves as a link between real data and a smart contract algorithm. The goal of the platform is to popularise and optimize the use of smart contract technology, including the elimination of reporting errors and inaccuracies. This is why Chainlink is attracting the attention of crypto-enthusiasts.
The Chainlink blockchain project was one of the first to offer a turnkey solution for integrating external data into the ecosystem’s smart contracts. The management was able to enter into partnership agreements with major companies working in this field, which enabled the project to become one of the major players in the digital information processing sector. Due to its robust external digital signal processing mechanism, Chainlink has been noticed by Brave New Coin, Alpha Vantage and Huobi, and even leading banking operator SWIFT. By partnering with Chainlink, digitized data delivery companies have been able to monetize information by selling the right to directly access the Chainlink ecosystem in the marketplace. Suppliers can send data through their existing APIs. Chainlink abstracts away all the complexity involved in running nodes and processing cryptocurrency payments, allowing providers to profit from their mature infrastructure, focusing solely on the quality of the data provided.
Node operators are the backbone of the Chainlink network; they run and maintain the Oracle infrastructure, which ensures that the smart contracts in each blockchain have secure access to real data. In the decentralized Chainlink network, every user can become a full node operator to reap dividends by participating in the management of critical infrastructure. An ecosystem of independent intermediaries ensures the smooth operation of leading decentralized finance applications such as Synthetix, Aave, Compound.
The Chainlink (LINK) team consists of 50 people, with the following being the key individuals:
Sergey Nazarov, director of the Shainlink project;
Steve Ellis, manager and technical director;
Brendan Magauran, director of payment operations;
Dmitriy Roche, software engineer;
Mark Obland, head of payment operations.
The creators aim to implement a whole network of oracles that will be compatible with BTC, ETH and subsequently other cryptocurrencies. There is currently no roadmap for Chainlink, which doesn’t play into the developers’ hands, but the creators have good partner support in the form of SWIFT payment system.
Smart contracts, which are called smart contracts, allow the exchange of funds without the use of outsiders.
The blockchains on which smart contracts operate cannot communicate with external systems of their own, and smart contracts are not capable of connecting outside the chain on their own. The link between the two is oracles, which mediate between blockchains and smart contracts. They enable communication with the outside world.
However, oracles to date have been centralised services, which means that any smart contracts using such services have a single point of failure, which negates any benefits derived from the decentralised nature of smart contracts.
To make up for such a disadvantage, Chainlink was designed as the first decentralised oracle to provide external data for smart contracts. As a result, the security and determinism of smart contracts can be combined with the knowledge and breadth of real-world external events.
The Chainlink cryptocurrency is decentralised, open-source (official project repository: https://github.com/smartcontractkit/chainlink), using special ChainLink software. With the help of LINK tokens, the creators of the project allow information providers to earn money. The more productive a particular provider is, the more the company earns.
The open-source standard makes it easy to create secure cross-network services and applications. With its universal messaging interface, smart contracts can exchange data between multiple decentralised blockchain networks, eliminating the need for developers to write their own code to create integrations into each specific chain. CCIP opens up a new category of DeFi applications that can be created by developers for a cross-platform system.
An advanced off-chain Chainlink reporting protocol (OCR 2.0), allows hundreds of independent, Sibilla-resistant nodes to sign and validate all transactions, eliminating any point of failure. The benchmark implementation, based on CCIP, provides a service for developers to securely transfer tokens through peer-to-peer networks to the destination chain.
As the developers have already stated, Chainlink tokens are not designed for mining, but there should be no problems with the storage of coins. The cryptocurrency is based on Etherium, so LINK can be stored in any wallet that supports the Etherium algorithm.
Chainlink nodes in the enterprise version are already deployed alongside public blockchains. One of Schainlink’s main challenges to date appears to be the decentralised operation of such nodes. The software of the nodes creates interoperability with the blockchain as well as with external services. Chainlink nodes function in the form of prescriptions, each of which consists of tasks. The tasks are processed according to the conveyor principle.
The total number of coins is 1 billion tokens, but only 350 million are available on the market, with the rest being used to develop the project.
Storage on cryptocurrency exchanges (e.g. Binance or Bithumb) is allowed if the user works with small amounts of coins. However, storage on exchanges does not have a sufficient level of security, so it is better to use wallets for this purpose.
For LINK storage, it is recommended to use any wallet that supports Etherium. Mycrypto wallet is a universal option.
For cold storage, we recommend the Ledger hardware safe, and as a mobile wallet the Crypto.com app, which will give you access to the full range of DeFi services.
You can buy Chainlink from several hundred cryptocurrency exchanges. In addition to those mentioned above, the coin is available from the following exchanges:
- Coinbase Exchange;
On the Binance exchange, the cryptocurrency can be purchased for fiat money, such as the Euro currency or the British pound.
The principle of purchasing LINK is as follows:
You need to register on one of the above sites after registration you need to go straight to KYC. It is better to choose the exchange Binance.
Next, you will need to top up your balance for the required amount. In the virtual terminal, select the currency you want to buy.
You can then transfer the cryptocurrency to another wallet or account, or store it as an asset on the exchange. The trading pair to trade is LINK/USDT.
You can also refill your balance through the P2P section, this option is considered the most optimal and with minimal fees. On our YouTube channel there is a detailed instruction.
The advantages of Chainlink are:
The system has the features of a blockchain system and smart contracts, but remains decentralised;
Information from external resources is verified for authenticity and validity;
Oracles are used to make transactions, which ensure the security and reliability of transactions.
The disadvantages of blockchain are as follows:
Blockchains are only capable of solving problems in a narrow segment, which would subsequently hinder the expansion of the project;
In the event of a mistakenly executed transaction, it will not be possible to recover the money spent;
The rapid increase in money transactions increases the likelihood of failure.
A cryptographically secured system of contracts will lead our daily lives, and the emerging global markets, into a new era of economic justice, transparency and efficiency. It will be an impartial world governed not by vague brand promises, but by cryptographic guarantees and real value created by individuals and institutions.
Chainlink’s mission is to accelerate innovation and adoption of smart contracts by enabling developers to create feature-rich, decentralized applications and providing global enterprises with a universal gateway to all blockchains.
Chainlink helps address the vulnerability of smart contracts when interacting with the traditional sector. By doing so, financial, educational and commercial organizations will improve operations, thereby improving security as well as freeing themselves from outside interference.
However, the main problem with the project is that the idea is limited, as it appears to be highly specialized. This was discussed in the Schainlink forum and it was concluded that at any moment, competitors could emerge that would be willing to offer this sector a wide range of opportunities.