What is Chainlink?
Headquartered in the Cayman Islands, Chainlink (LINK) is a decentralized oracle service that aims to connect smart contracts with real-world data, creating a much-needed bridge between contracts and secure external data. When an Ethereum developer wants to implement a smart contract he is unable to connect with key external resources like off-chain data and APIs. Chainlink now allows safe connectivity between the smart contract middleware and the external data and allow the contract to be executed.
ChainLink had a successful ICO and the company is ranked nr 15 on CoinMarketCap. https://coinmarketcap.com/currencies/chainlink/
Chainlink receives a COVID-19 uppercut and drops 64%.
Chainlink started 2020 as a highly anticipated project, valued at only $2.35 USD on January 1 to reach a top at $4.95 USD on March 4. When COVID-19 hit the cryptocurrency market, causing a panic-selloff, Chainlink finally bottomed at $1.78 USD on March 17, after a -64.04 % brutal push down during two weeks of global panic and an overall flight into cash. Currently, the price hovers at $2.35 USD (1.60%), and the smart money is likely to pick up the project at a discount of its year opening price of $2.35 USD. As the market recovers and cryptocurrency, in general, finds more adoption, Chainlink is a must-have coin for the smart investor.
Chainlink creates a much-needed LINK between Ethereum smart contracts and outside data.
Just like Vitalik Buterin realized the full potential of a much broader use case for blockchain, far beyond Bitcoin's peer-to-peer payment transactions, Chainlink realized Ethereum had its limitations as well.
Vitalik's smart contracts were limited to use on the Ethereum blockchain only, making them a very useful tool, however, with Chainlinks innovative solution, data from outside the chain can now give smart contracts an immense boost and open up more use-cases. How does this technology work?
A bridge between on-chain and off-chain infrastructure:
On-Chain Functions: The on-chain smart contracts include oracles created to process user data requests. There are 3 types of contracts:
reputation contract: ensures reliability of oracle provider;
order-matching contract: passes the requesting contract to the appropriate oracle;
aggregating contract: collects data from selected oracle and delivers the result to the requesting contract.
Off-Chain Functions: The off-chain oracle nodes connected to the Ethereum network.
off-chain oracles collect data;
ChainLink Core processes the data;
ChainkLink Core passes data to the on-chain oracle;
off-chain nodes receive payment for data collection in LINK tokens;
off-chain nodes allow integration of external adapters or dApps on the Ethereum network.
351665157-5252f330f6fcbb7a231f965fe9be3d7de5097cade8b2d0064624d69cf82c1484.png
Figure: Chainlink working with SWIFT.
*** Example of ChainLink Usecase: SWIFT! ***
ChainLink is working together with SWIFT (Society for Worldwide Interbank Financial Telecommunication), a Belgium based financial telecommunications service provider, linked to more than 11,000 financial institutions in more than 200 countries, covering 32 million messages per day. In recent years being criticized for its inefficiency with regards to transaction time, cost and lack of transparency, Swift is currently working with ChainLink to develop the SWIFT Smart Oracle.
The ChainLink-Swift deal is massive considering that Swift offers financial services such as securities, treasury & derivatives, trade services, and payment and cash management. People who want to know the size of this market can do their own research, but we already tell you that this market is HUGE. Take a look at this infographic (October 26, 2017), showing you all the money in the world: https://money.visualcapitalist.com/worlds-money-markets-one-visualization-2017/
It takes us far beyond peer-to-peer transactions of a currency! It opens up the whole stock market and derivatives market. In 2017 we had:
a $7.6 trillion USD currency market (coins and banknotes);
a $73 trillion USD global stock market;
a $215 trillion USD global debt market;
a $217 trillion USD real estate market;
a $544 trillion USD to a $1.2 quadrillion USD derivatives market.
The partnership with SWIFT is the largest by far but ChainLink also builds partnerships with Zeppelin OS (smart contract operating system), Request Network (exchange platform offering a standard for fiat to cryptocurrency exchanging), Signal Capital (London based private asset firm),...
Marketing Campaign.
Another positive is the lack of a marketing campaign, with regards to the fact that this has left Chainlink yet to be discovered by most cryptocurrency investors. I appreciate the fact that the ChainLink Team first wants to create a successful product before focussing on marketing, whereas we have witnessed many marketing campaigns of cryptocurrencies that had no real use-case.
Important links:
Website 1: https://chain.link/
Website 2: https://www.smartcontract.com/
Explorer: https://etherscan.io/token/0x514910771af9ca656af840dff83e8264ecf986ca
Medium: https://medium.com/chainlink
Source Code: https://github.com/smartcontractkit/chainlink
Whitepaper: https://link.smartcontract.com/whitepaper