What is Chainlink?
Chainlink is a decentralized oracle network that connects blockchains with public information. It enables smart contracts (a computer protocol meant to digitally capture the terms or performance of a contract) to communicate securely with external APIs, payment systems and other services.
Chainlink is the protocol for getting data onto the blockchain. This will beused to develop the smart contracts that everything handle from crypto loans to insurance. A smart contract by itself can not get access to data outside the blockchain (read: off-chain data). Chainlink offers the solution to this and is the connection that comes from different parties (so-called nodes) can offer data, bring together and available for the smart contract. Chainlink is thus a data oracle.
What role does Chainlink play?
The image shows what role Chainlink plays. This is the connection from Web1 and Web2 to blockchains (Web3)
The Chainlink oracle proceeds in three steps after a specific request is received from a smart contract. Chainlink then creates a new smart contract to facilitate three sub-contracts.
- Step 1: The reputation contract, this sub-contract controls the provider of the oracle, this control deals with reliability and checks the quality of the information provided in previous oracles.
- Step 2: The order-matching contract, sends the smart contract request to Chainlink’s confirmation computers and receives bids, before selecting the appropriate number and type of computer to fulfill the request.
- Step 3: The aggregation contract, gets information from the different computers. It brings this information together into a final result. Before this result is sent to the smart contracts that requested the information, another kind of “final score” is calculated.
For the picture, this all completed in seconds.
To give an easy example. When an app is used on the blockchain (dApp) and it wants to know what the weather will be like tomorrow in Amsterdam, Chainlink makes a request. First step in the request they go looking for the most reliable source. The second step weighs how difficult this request is and how many and which computers are needed to check this request for authenticity. Final step, everything is brought together and the conclusion is drawn from that what the answer to this request is.
This also works in the other direction, where a request from outside the blockchain can request data delivered on the blockchain.
What is Chainlink Oracle’s contribution to the Chainlink network?
Chainlink’s role is critical in enabling secure and reliable interactions between smart contracts and external data sources. Chainlink’s innovative oracle network, with its decentralized setup and consensus mechanisms, provides the solution for delivering accurate and reliable data to smart contracts, allowing them to fully function and interact with the outside world.
Chainlink Oracle and the future
There are many positive Chainlink expectations, especially with its recent partnership with Coinbase Cloud, a provider of infrastructure for crypto businesses. Coinbase Cloud has joined as a *nodeoperator in Chainlink’s network, which will make a strong contribution to the technology and reliability of the network.
*Anode operator is an individual or company that helps bring together the data from these off-chain oracles. They agree on the accuracy of the data before it is offered to smart contracts.
Chainlink has expanded its dominance in the crypto industry in recent years with high-profile integrations across networks, services and organizations such as the NBA, the World Economic Forum, PwC and many more.
Partnerships of Chainlink
Chainlink has a number of key partnerships that contribute to its success. Below we discuss some of these collaborations.
Swift and Chainlink
Swift, the largest used global financial communications network with more than 11,000 banks, has partnered with Chainlink since 2017 to deploy smart contracts in today’s financial sector. The result is a secure and reliable connection between the two technologies.
Google Cloud and Chainlink
Google Cloud has integrated Chainlink into their approach. With this integration, developers can use Chainlink’s external adapters to give their dApps and smart contracts access to Google Cloud data.
Oracle and Chainlink
Oracle Corporation, one of the largest software vendors from Sillicon Valley has in 2019 announced to make their data available to smart contracts on the blockchain. Oracle Corporation has a market value of $280 billion.
Chainlink’s role at Oracle
Chainlink plays a crucial role at Oracle Corporation by providing a secure and reliable bridge between Oracle’s database and the blockchain. This allows Oracle customers to use blockchain technology data integrate into their business processes.
Eric Schmidt and Chainlink
Eric Schmidt, former CEO of google plays an important role in the development of Chainlink. He is a big proponent of blockchain technology and has helped Chainlink reach a wider audience. Schmidt will speak at Smartcon2023 in October along with Sergey Nazarov (Co-Founder Chainlink) about growth and development at Chainlink.
Eric Schmidt’s role at Chainlink
Schmidt has a consulting role at Chainlink, for years he used his influence and network to connect Chainlink with key players in the tech industry. This has resulted in important partnerships, such as those with Google Cloud and Oracle.
Conclusion
Chainlink has established itself as a pioneer in connecting blockchain to the real world. The network is constantly expanding and strengthening its position in the market thanks to valuable relationships with Swift, Google Cloud, Oracle and with the support of influential figures such as Eric Schmidt.
The future looks promising for Chainlink, given the positive expectations and growing acceptance of blockchain technology. As Chainlink continues to innovate and enter into new collaborations, it is likely to play an even larger role in the evolution of decentralized financial applications and the larger blockchain ecosystem.
“Our technology allows people to form relationships without the need to put your faith in anyone’s promises” ~ Sergey Nazarov
