The average individual today has one thing or the other to say about cryptocurrency. Some might remember the sad stories when its price dropped drastically causing major losses across the blockchain industry. The fact still remains that the blockchain industry is still evolving and has not failed with its numerous features.
One common feature that has been used by most cryptocurrencies is Ethereum Smart Contracts which has been termed the next digital lawyer because of the large role it plays to act as a third party between two or more parties. Its transparency and trustless services have helped in securing funds and building trust in any cryptocurrency platform using it.
ChainLink cryptocurrency is one of the numerous coins that has employed the use of smart contracts. In its implementation process, ChainLink has used it as a tool to assess external data (off-chain) and use such data in its blockchain (on-chain). People have seen chainlink as a link to bridge the gap between getting information outside its network and using it inside its network.
What is ChainLink?
ChainLink’s existence can be traced to 2017 when it was launched by Fintech Company. The idea that made it go live was the sole contribution of Sergey Nazarov and Steve Ellis. Both cryptocurrency experts worked on using a decentralized network of Oracle operators to have access to relevant data feeds and information from outside blockchain. This made its network operators and investors have access to quality data and information from outside blockchain.
Having understood the idea that surrounds ChainLink and its existence, we are going to look at its benefits and how it can solve the ever-growing requirements of many investors.
1. Access to first class information and data through the use of Oracle operators
Chainlink blockchain has created an avenue by which information gathered from outside its blockchain (off-chain) can be used inside its blockchain (on-chain). It has employed the use of the Oracle network as the mediator and link between on-chain and off-chain. Oracle’s function is to source relevant data/information from the outside world and validate them before it can be used by any user in its on-chain. This implies that without the Oracle network, smart contracts will be deprived of relevant information to run its functions in ChainLink.
This makes ChainLink not only regarded as a decentralized system of communication within the system but a network where relevant and valid information can be sourced for and used within the system.
2. A secured smart contract-type
The incidence of cheating and fraud cases witnessed by others in the blockchain industry led to the creation of smart contracts. No doubt, fraud cases exist in any financial institution, but with the use of smart contracts, there are zero risks of incidence of fraud cases. Smart contract employed by ChainLink act as a third party system where agreement can be protected and help secure funds in case of any bridge of contract from any party. This smart contract is the basis of the architectural design of the whole ChainLink blockchain network.
3. A four-way security system to guide users in using their Oracle services
The implementation of the Oracle network in ChainLink has helped to validate resources from outside the system. But there might be cases when corrupted Oracle might provide an incorrect response. To avoid the incidence of this corrupted Oracle, Chainlink incorporates a four-way security system which are Validation System, Reputation System, Certification Services and a Contract-upgrade Services. Let’s examine each one a bit further.
- Validation System – This helps monitor every aspect of on-chain behavior that helps the user in the selection of the best Oracle to use. This system helps to check the response of Oracle for its correctness.
- Reputation Services – This security services will help to record and publish the ratings of users of oracles which can help build trust in the system and a firm reputation of the Oracle.
- Certification Services – This security service is designed to add extra security to the first two security services. This will help to issue a certificate to high-quality Oracle providers as a means to guide users in selecting the right Oracle.
- Contract-upgrade services – This services act as a backup in case of any bridged in the system by a faulty oracle. If the system is vulnerable to any hack from within the on-chain, a new set of supporting Oracle will be generated to protect the system.
4. An avenue where business can thrive
Information is the bedrock of any business or organization. Running your business or services requires the relay of valid data and information. The ChainLink decentralized network can be a platform where business can thrive. This can help both new and old businesses who find it difficult to access first-class information to have it on their fingertips. Individuals and businesses can use their Oracle network through APIs to bridge the gap between outside information and their investment and business in the ChainLink network.
5. Highly scalable for its users
This brings to mind the one question everybody wants to ask – is Chainlink scalable? Scalability is one of the selling features of most cryptocurrency. That is, its ability to handle multiple information in its blockchain network. To a very large extent ChainLink is very scalable as at when this article was released. Its scalability depends on the individual nodes of the system itself. But as the network grows, the node selection process could get costly on the node operator.
6. A user-friendly environment for operators
Understanding the idea of ChainLink through its white paper and reviews might look a little abstract to many new individuals. But its platform and environment have been created with an easy interface and architectural design. Its architecture design was divided into two: on-chain and off-chain architectural design. Both design work as a unified component by which the relay and communication of information can be passed with ease to ChainLink Operators.
7. A promising future for its investors
Although ChainLink is currently live as a testnet, its promises have helped to keep hope alive. Chainlink creators have been able to partner with a list of some big players in the different industry such as Web3, Polkadot, OpenLaw, Swift network and a host of others. This has shown that there is still a lot that the future holds for ChainLink and its investors.