What is Chainlink (LINK)
Chainlink is a decentralized blockchain oracle network that allows non-blockchain information and data to be used by smart contracts on the blockchain. Smart contracts are self-executing contracts in which the terms and execution of the agreement are written into code. While they can operate autonomously on the blockchain, smart contracts cannot currently access data outside of their blockchains. This limits their functionality and real-world use cases.
Chainlink essentially functions as a bridge between the on-chain and off-chain worlds, allowing individuals and organizations from traditional industries to utilize and reap the benefits of blockchain technology.
How Does Chainlink Work
Chainlink operates a decentralized network of oracles, which are responsible for fetching external data, such as price feeds, weather information, sports scores, and more. This data is then provided to smart contracts.
Smart contracts on blockchain platforms, like Ethereum, will request specific data from the Chainlink network and a contract will be created on the network. Before fulfilling these requests, the track record of the oracle nodes will be verified.
Nodes that consistently provide accurate and reliable data are rewarded, while those that provide inaccurate or manipulated data may lose reputation and rewards. Thus, nodes are incentivized to provide accurate and timely data to maintain the integrity of the system.
Chainlink employs a consensus mechanism to ensure the accuracy of the data. The oracle nodes will independently fetch and provide the requested data. After that, the network aggregates and calculates a final result to mitigate the impact of potentially erroneous or malicious data. This allows Chainlink to reliably provide accurate data to smart contracts on blockchains.
Chainlink Use Cases
These are some of the use cases for Chainlink:
- Decentralized Finance (DeFi)
Chainlink allows DeFi applications to utilise real-world data such as interest rates and asset prices, enabling these applications to create advanced smart contracts for use in financial products and monetary instruments on-chain.
- Gaming & NFTs
Chainlink can facilitate the creation of non-fungible tokens (NFTs) that represent ownership of in-game assets, virtual real estate, or digital collectables. Oracles can be used to provide external data about the rarity or attributes of these assets.
- Supply Chain Management
Chainlink oracles can provide supply chain smart contracts access to real-world data such as GPS, humidity, temperature, and more. This can enhance transparency and reduce fraud by ensuring that the data recorded on the blockchain matches real-world events.
Supply chain tracking, weather data, and market prices can be integrated into smart contracts using Chainlink to create more efficient and transparent agricultural systems.
Chainlink can assist in securing transmitting and verifying medical data for telemedicine, insurance claims, and medical research purposes.
- Real Estate
Processes in real estate transactions, like property ownership transfers and rental agreements, could be automated using smart contracts. With access to real-world data, Chainlink oracles can verify property valuations and rental prices.
LINK is the native token of the Chainlink ecosystem. LINK tokens serve as collateral and incentive, and can also be used for staking.
Chainlink has a maximum supply of 1,000,000,000 LINK tokens of which 538,099,970 LINK tokens are in circulation as of the writing of this article.
The distribution of LINK tokens is as follows:
- Public Token Sale – 35%
- Node Operators & Ecosystem – 35%
- Company – 30%
Investors and traders may find value in LINK should they believe that Chainlink’s ability to bridge off-chain data for smart contracts to use on blockchains allows it to position itself as the preferred decentralized oracle network in the blockchain industry.
How To Trade LINK On The Flipster App
To trade LINK on Flipster:
- Download the Flipster app and set-up your account
- Go to [Trade]
- Click on [Search] at the top of the page and type in LINK
- Click on LINK
- In the [Amount] field, type in the amount of LINK you wish to buy or sell. Alternatively, you can select the percentages below to choose how to use from your available funds.
- Click [Preview order] to check your order
- Once you have confirmed the details, click on [Buy LINK – Long] button or [Sell LINK – Short] respectively.
Disclaimer: Any opinion shared in this article is strictly the views and opinions of the author and should not be construed as financial advice. Flipster makes no judgment on the projects or the content uploaded.