Chainlink: Tamper-Proof Smart Contracts On Any Blockchain
Release Date: 19 September 2017
Official Website: https://chain.link
What is Chainlink?
Chainlink is one of the most recent cryptocurrencies to hit the market . It also happens to be one of the smartest uses of this technology; Chainlink serves to provide tamper-proof inputs and outputs for complex smart contracts on any blockchain.
Many of you won’t know what any of that means, so allow us to explain. A smart contract is essentially a program that helps dictate the transfer of different cryptocurrencies between different parties. It sets specific conditions, and the contracts themselves are stored within a blockchain.
Usually, these smart contracts are created using tamper-proof data. So, why is Chainlink even required? Well, tamper-proof contracts only exist within the blockchain environment. The problem with this is that a lot of people use regular FIAT currency to purchase cryptocurrencies. As such, these transactions can now be viewed and verified by just about anyone. Also, smart contracts aren’t connected to data in the ‘real world’.
This is where Chainlink comes into play - it wants to solve this significant issue. It allows smart contracts to be connected to the broader world outside of blockchains. As a result, these contracts can handle fiat currencies (any currency that’s considered legal tender, e.g. USD) and keep all the significant data in sight.
How does Chainlink work?
The main problem is that smart contracts don’t have access to their own data. When a contract is implemented, there’s an issue with connectivity. It can’t link to other external resources and data outside of the blockchain environment.
Thus, a solution was created; Oracles.
Effectively, an oracle is a gateway that lets smart contracts connect with data inputs and the outside world. The issue with this is that there’s a high chance of failure and a good degree of unreliability involved. Contracts are connected through things called oracle nodes. Each one goes through one node, so the contract is only really as reliable as that specific node. If the oracle ends up going down, then the contract loses all of its functionality.
To combat this, Chainlink has created a decentralised oracle network. This offers users the very best security and ensures the contracts remain safe and tamper-proof. The idea is relatively simple; you use multiple Chainlink oracles instead of relying on one.