Chainlink: A Decentralized Network of Nodes
Have you heard about Chainlink? Actually, what is Chainlink? Chainlink is a decentralized oracle network that provides data to smart contracts on the blockchain. To pay for those services in the network, the native Chainlink token is known as “Link” is used.
The main aim of the decentralized chainlink is to connect smart contracts with data from the real world.
The Chainlink network has a reputation system, node providers that have a large amount of LINK can be rewarded with larger contracts, while a failure to deliver accurate information results in a deduction of tokens.
How does Chainlink work?
The whole process starts on a smart-contract-enabled blockchain. When smart contracts require data, they put out a request for information. The Chainlink protocol registers this request as an ‘event’ and in turn, creates a corresponding smart contract known as Chainlink Service Level Agreement (SLA) Contract.
This is to get off-chain data. The Chainlink Service Level Agreement (SLA) Contract generates three sub-contracts: a Chainlink Reputation Contract, a Chainlink Order-Matching Contract, and a Chainlink Aggregating Contract. Let’s see the functions of each contract.
- Chainlink Reputation Contract: checks an oracle provider’s track record to verify its authenticity and performance history and evaluates and discards disreputable or unreliable nodes.
- Chainlink Order-Matching Contract: delivers the Requesting Contract’s request to Chainlink nodes and selects the right number and type of nodes to fulfill the request.
- Chainlink Aggregating Contract: takes all the data from the chosen oracles and validates and reconciles it for an accurate result.
The nodes of Chainlink then take the Requesting Contract’s request for data and use Chainlink Core software to translate that request from an on-blockchain programming language to an off-blockchain programming language that a real-world data source can understand.
This is then routed to an external application programming interface (API) that collects data. These collected data are then translated back into on-blockchain language through Chainlink Core and sent back to the Chainlink Aggregating Contract.
The Chainlink Aggregating Contract reconciles data from multiple sources.
Where to get Chainlink?
Chainlink token, Link tokens are available on a number of cryptocurrency exchanges around the world. There are several ways to buy Link tokens from these exchanges such as with fiat currencies or by exchanging any other cryptocurrencies. How to buy Chainlinks? The basic process included in buying Link is given below.
- The first step is to create an account in the cryptocurrency exchange where you prefer to buy and sell cryptocurrencies. For this, you have to provide your name, email address, phone number, and proof of ID to register for an account. Also, set up two-factor authentication to provide an extra level of security.
- Deposit the funds in your account and it varies depending on the cryptocurrency exchange you choose.
- Buy Chainlink token with fiat currency, or exchange BTC or ETH for LINK on your chosen exchange.
In short, ChainLink is an intermediate blockchain that aims to connect blockchains with other off-chain applications. It acts as a fully decentralized oracle network to help connect smart contracts with external resources, off-chain payments, and APIs.