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When Ethereum went live in 2015, the service offered revolutionary business opportunities for the blockchain. Ethereum succeeded in freeing the blockchain from the myth of purely financial technology. The Ethereum Smart Contracts were a revolutionary new application for the blockchain.
The problem: Smart Contracts are designed to exclusively manage data on the blockchain. Their potential lies in the management of data that cannot be changed and are stored decentralized. However, this potential can only be exploited to a limited extent because there are no connections to the world outside the blockchain.
This is where ChainLink comes in. ChainLink can be used to connect smart contracts with off-chain APIs, databases or other resources. ChainLink basically takes information from outside the blockchain and pushes it onto the chain. In this way, the platform creates a link between the existing infrastructure and the block chain. This creates completely new application possibilities for Smart Contracts.
ChainLink basically consists of two components
The on-chain functions and the off-chain functions. The on-chain functions are responsible for connecting user contracts on the blockchain with the Oracle contracts of ChainLink. The Oracle contracts then receive the required information from outside the blockchain and transfer it to the user contracts.
Off-Chain ChainLink works with so-called "ChainLink Nodes". These are responsible for collecting data from other off-chain resources such as APIs or databases on the block chain according to the user contracts. This data is then transferred to the blockchain and the Oracle contracts via a ChainLink core. Anyone operating a ChainLink node is rewarded with LINK, ChainLink's token.
Compared to other Oracle solutions, ChainLink has the advantage of being completely decentralized. The problem with centralized Oracle platforms is that it is easier to falsify data before it enters the block chain.
However, ChainLink's decentralized structure allows it to implement security mechanisms that prevent data from being falsified before it enters the blockchain. Among other things, a request can be forwarded to several ChainLink nodes, which then collect the data from different sources. If they contradict each other significantly, a warning is triggered.
The team behind ChainLink
Behind ChainLink is the parent company SmartContract.com, a company that was voted "Blockchain Applications Cool Vendor" by Gartner in 2017. ChainLink's CEO is Sergey Nazarov, who was part of FirstMark Capital's investment team during his career and has built several peer-to-peer marketplaces.
Nazarov is a passionate fan of blockchain technology and believes that blockchain applications will change our society forever - and not only in the financial sector.
ChainLink has big plans. The Oracle problem is one of the biggest challenges for innovative blockchain applications outside the crypto currency area. With ChainLink, SmartContract.com already has a theoretically functional link between the blockchain and external sources. The resulting application possibilities are enormous - especially with regard to the decentralized structure of ChainLink.
SmartContract.com has already succeeded in winning several important financial technology companies as customers. Among them is Swift, a leader in financial news services.
ChainLink also has a highly skilled team of consultants from the blockchain industry, including former RSA chief scientist Ari Juel, consensus secretary Andrew Miller, and Ethereum Community Manager Hudson James.
If ChainLink's ambitious plan were to succeed, it would be a breakthrough in blockchain technology that would make it possible to open the blockchain to the wider community and integrate it into everyday life. The potential of the ChainLink coin is correspondingly good - provided, of course, that the company does not fail.