What is Chainlink?

Page Summary

Chainlink is a decentralized blockchain oracle network built on Ethereum. This network aims to make smart contracts available to everyone. Chainlink’s founders believe that smart contracts offer solutions for many industries because they can take over unnecessary tasks from humans. The founders think that Ethereum smart contracts cannot communicate well with other systems. They want to solve this by connecting the network to different blockchains.

What is Chainlink?

They will give smart contracts access to data such as web APIs and traditional banking information. Affiliated parties provide this data and can then use the smart contracts in return. As a result, they do not have to switch to a new system and they can keep using smart contracts. 

Chainlink users can use smart contracts and receive a reward in LINK tokens for providing data and APIs. When users do this, they are called Chainlink Node Operators. They are then responsible for maintaining the connection between the API and Chainlink. The Chainlink network consists of all the connected Node Operators.

What are LINK tokens?

Node Operators get paid in LINK tokens. The value of LINK tokens depends on the number of active operators. Chainlink works for its Node Operators with a reputation system. The Node Operators who have locked in LINK tokens for a certain amount of time will get the larger smart contracts. If they fail to provide enough information for these contracts, they will lose their tokens.

What is an oracle?

An oracle provides the external data needed to execute a smart contract. It monitors real-world events and sends this information to the blockchain so that it can use this data. 

Who is behind Chainlink?

Sergey Nazarov and Steve Ellis founded Chainlink in June 2017. 6 experienced advisors aid them. This team works with other parties, including Celer Network (CELR). This is a crypto company building a Layer-2 Scaling Platform. This allows smart contracts and transactions to take place outside the blockchain, also known as off-chain.


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