So a few days ago we were hanging out, freestyling about crypto, you know…the usual…and we thought we had come up with a great idea, only to be let down….let us take you back to last week…
*stands up from couch with half empty bottle of whiskey*
‘Back at ya with another freestyle ya’ll’
“Smart contracts are cool, but they kind of stink,
There’s no way to connect, if only there was a LINK,
But we find solutions, they call us the ORACLE,
Because this new idea will show you a miracle”
*plumps back on couch…looks up in deep thought*
“I wonder if there is a way to LINK these CHAINS to external API’s…like a decentralized oracle! This def doesn’t exist,” said very drunkenly
“We’ll be the next Ethereum!!! Holy SHIT!”
Turns out this idea exists…it exists very much…actually there are several options. We are idiots.
So, we feel compelled to discuss a project with you working on just this: ChainLink
While our writing tenses may be off, and our grammar sucks (perhaps purposely)…we can damn well tell you about them cryptos.
Let’s dig in…(after we sober up)
ChainLink (ticker: LINK)
Wtf is this shit?
Okay, clear headed now….and headache gone.
ChainLink is a cool project that has been gaining momentum. It is a decentralized oracle network….basically acting as middleware between smart contracts and external data sources.
According to ChainLink’s website and white paper, smart contracts cannot connect to external API’s primarily due to the consensus mechanics associated with a decentralized blockchain. So while smart contracts aren’t bad for legal and some financial purposes, they are extremely limited in integrating with external data sources for developers to create usable applications that can analyze data such as weather, crime, news…anything really.
So..to summarize the main issue here:
- Smart Contracts require middleware to pull in external data…but the issue is that they have no means to reliably connect to these sources due to the mechanics by which consensus is achieved
- Centralized oracles have a central point of failure (lol, duh) and this raises uptime and data integrity concerns. Even if there is a node on a blockchain network that smart contracts can connect to, these issues still exist. Since smart contracts are tamper-proof and self-executing…if a smart contract is receiving data from one source, then you better damn hope the data is reliable and accurate. Receiving the wrong weather data would be a pain in the ass but receiving incorrect financial data or business metrics can result in far greater problems.
So… ChainLink is creating a decentralized oracle network..make more sense now?
Let’s get a bit more technical…
Chainlink is a decentralized network of ChainLink nodes.
Each ChainLink is rewarded in LINK for selling the data feeds that it connects to and offers to the network. This can be different types of data, payment API’s, or virtually any third-party system that can be connected to.
ChainLink has off-chain and on-chain nodes.
On-chain node functionalities primarily include the following:
- Find and select reputable data sources for a request that was received. A request is sent from a requesting contract and has an SLA (service level agreement) that has fees associated with it and oracle reputation requirements (different oracles have different reputation scores).
- An aggregating contract then aggregates data for the requesting contract, averages all of the data, then sends this weighted answer to the requestor. They do this to ensure data integrity. HENCE DECENTRALIZED ORACLE.
- Records the transaction to the blockchain
Off-chain nodes connect to Ethereum’s blockchain but are external to the blockchain.
Off-chain nodes collect data from off-chain resources such as stock prices, weather, etc.
Thus.. it is ChainLink that offers a solution than can communicate with these off-chain and on-chain nodes and delivery quality data to requestors….fostering a more useful smart contract world.
Who tf is behind this shit?
Sergey Nazarov is their CEO. He joined the crypto world back in 2011. His LinkedIn says he is the CEO of ‘smartcontract.com’ which references ChainLink. Possibly just a marketing tactic, but would be nice to see ChainLink referenced on a LinkedIn…He has several past companies which he launched, some which only operated for a very short time. ChainLink seems to be one of his biggest ventures yet, and so far he has put together a solid team. Let’s see how they do.
All in all, mid-tier shitcoin. It would be neat if there were reliable, decentralized oracles. Still, they have competition, and good competition at that, so they better keep the hustle up. Hope you learned some shit.
– Mike and Aaron