These real-world data points that can be connected to blockchain-based smart contracts are known as “oracles.” Each oracle in the Chainlink decentralized oracle network has an incentive to provide accurate data with a reputation rating assigned to each. When oracles follow the software’s rules and provide useful (accurate) data, they are rewarded with the Chainlink network’s native ERC-20 cryptocurrency token, LINK.
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What is a chain link?
Chainlink (LINK) is a cryptocurrency and technology platform that allows non-blockchain companies to securely connect to blockchain platforms. Chainlink’s LINK coin pays Chainlink network operators and guarantees agreements on the network’s smart contracts.
Chainlink is Oracle’s decentralized network or blockchain abstraction layer. Chainlink uses blockchain technology to enable secure on-chain and off-chain computing by supporting so-called hybrid smart contracts and an interconnection protocol.
The Chainlink blockchain is hosted on the Ethereum platform, which uses a proof-of-stake operating protocol.5 Additionally, Chainlink is an open-source blockchain project, which means anyone can view the project’s code and contribute.
How is Chainlink different from Ethereum?
Since Chainlink’s LINK token is built on the Ethereum platform, LINK is compliant with the protocols of the Ethereum platform.
Chainlink tokens have a single use case: payment to node operators on the Chainlink network.
What can I buy using LINK?
LINK cryptocurrency is used to incentivize Chainlink node operators and is not intended for daily purchases. These network participants, responsible for securely transferring data to and from blockchains, are paid in LINK.
Why is Chainlink popular?
Chainlink’s decentralized oracle can connect many types of data across different blockchains, creating many potential applications for Chainlink. Chainlink can help integrate blockchain technology into many industries and business functions.
Chainlink created by Oracle?
Oracle Corp. (ORCL) is an information technology company specializing in database management. Chainlink is not affiliated with Oracle Corp. Chainlink calls itself a decentralized oracle network, with an “oracle” being a broad group of intermediaries that connect blockchains to autonomous information systems.
Bottom line:
Chainlink is a blockchain project designed to connect different networks and protocols through oracles. Oracles are network tools that enable communication between networks. The goal of the project is to provide support for all blockchains, facilitating the global movement of data between blockchains.
How does Chainlink work?
To facilitate communication between its users and external data sources, Chainlink divides the execution process into three distinct stages.
Oracle’s choice: First, Chainlink users create a service level agreement (SLA) that specifies a set of desired data requirements. The software then uses a service level agreement to connect the user to oracles that can provide data. Once the parameters are set, the user submits an SLA and deposits their LINK cryptocurrency into an order matching contract that accepts proposals from the oracles.
The oracles then process the data and send it back to the contracts running on the blockchain. Link in the chain.
Aggregation of results. The last step is to calculate the results of the data that the oracles collect and return them to the aggregation contract. The aggregation contract accepts responses, evaluates the reliability of each one, and returns a weighted score to the user using the sum of all received responses.