Chainlink (LINK) is a decentralized oracle network that aims to connect smart contracts with data from the real world. Since smart contracts on blockchain networks cannot access external data directly, Chainlink securely feeds external data to smart contracts on various blockchains. Smart contracts are able to interact with external systems, making them more useful and applicable in a wide range of real-world applications.
The native token of the Chainlink network, LINK, is used to pay for services on the network, including data requests to oracles and rewards to node operators for providing secure and accurate data.
Chainlink was launched in 2017 by Sergey Nazarov and Steve Ellis, with the vision of creating a bridge between blockchains and external data sources, thereby expanding the potential applications for smart contracts beyond tokenization and simple transactional purposes. By ensuring that the data fed into smart contracts is accurate and tamper-proof, Chainlink enhances the reliability and trustworthiness of decentralized applications (dApps).
The Chainlink network operates by allowing multiple Chainlink nodes to evaluate the same data request, mitigating the risk of single points of failure and data manipulation, a critical consideration for financial applications, insurance contracts, supply chain management, and other sectors where trust and data integrity are paramount.
Chainlink's architecture comprises three main components: Chainlink nodes, which collect and deliver data; the Chainlink network, which aggregates and validates the data from multiple nodes; and smart contracts, which specify the data requirements and actions to be taken based on the data received. Chainlink supports many data types and sources, such as financial market data, event outcomes, weather data, and various APIs. ex dApps that require reliable real-world data.
