November 23, 2018
Name of Token: Chainlink (LINK)
Leadership: Sergey Nazarov
Token Ecosystem: ERC20 Token on the Ethereum Blockchain
Main Use Case: Interoperability
Market Cap: $117,423,502 (November 23rd, 2018)
Volume: $2,294,234 (November 23rd, 2018)
Price: $0.335496 (November 23rd, 2018)
Circulation Supply: 350,000,000 LINK
History of the Chainlink Token:
Chainlink has been in development since 2017 and has undergone major changes earlier this year.
The main use for Chainlink tokens is to connect smart contract platforms to traditional financial structures through a secured and trustworthy gateway. It allows to connect smart contracts with key external resources like off-chain data and APIs (even including legally binding e-signatures and bank payments), which allows smart contracts to mimic real world financial agreements. The tokens act as middleware that allows smart contracts on various networks to interact with the critical resources they need to become useful.
This is best described by their website tagline: “The Chainlink network provides a reliable tamper-proof inputs and outputs for complex smart contracts on any blockchain”. Tackling the Oracle Problem, Chainlink is giving users the ability and trust for their smart contracts to interact with the outside world. Its potential uses are endless.
They have addressed the Oracle Problem by decentralizing oracles (anyone can run their oracle software and compete on the network), aggregating collected data on-chain, abstraction of data indicators and types of connections, a reputation system for the oracles, and a penalty system for non-performant oracles. On top of these features, Chainlink oracles work together to create a standard for transactions on the network and boast unlimited practicality as the oracles can support literally any connection is has developer support for. Lastly, each oracle has a financial and reputational incentive to always be honest.
Chainlink boasts the ability to be able to support literally any data source or blockchain with what it calls “external adaptors”. Without these, the oracles would only be able to support public data sources. The external adaptors are micro-services that gather data on behalf of the oracle. In short, the node operator can sign up to key-based API’s, specify their key to the external adaptor, and provide that data source to any contract that wishes to use it.
The Chainlink oracle (or “Chainlink Node”), is written in Golang and located on their Github (https://github.com/smartcontractkit/chainlink). The first version of the Chainlink node was built in Ruby, using a relational database called PostgreSQL. The new version (updated in February 2018), is built in Golang using a key/value Golang native database called BoltDB. This switch facilitated operations and gave Chainlink the ability to scale and hence handle a higher volume of transaction requests while keeping the same computing resources.
By using BoltDB, Chainlink has widened its scope of potential users by simplifying the process of creating the node software required. There is no need to run the database as a separate service as all features are directly built in.
To use the LINK token, users need to send enough LINK to the requesting contract in order to create the Chainlink request. If you would like to try Chainlink today (test networks), this is 1 LINK per request.
ChainLink Industry Case Studies:
As Chainlink is still in its infancy, we saw interesting real-world potential uses for its implementation on the Ethereum Blockchain at the 2018 September ETH San Francisco Hackathon.
A notable entry was by team B3PO, who created a system that handwrites blockchain-validated information on an absentee voting ballot to be sent through the mail. This showed the radical possibilities enabled by Chainlink in the political process – safe and secure voting could be a possibility for the citizens of any country, no matter where they are.
The winning entry was by Xuefeng Zhu who showcased his application “Micro Subscription”. The app holds cloud providers accountable to their guarantees by monitoring server uptime data. It uses an on-chain oracle to establish a smart contract between the user and the provider, ensuring the customer receives the service he pays for.
Major Partnerships, News, and Notable Achievements:
On October 7th 2018, Chainlink released its first five oracles. Since the release of the oracles that include a flight tracker, data shipping, and a virtual currency price tracker, the LINK token has seen a steady increase in its trading price from ~$0.33 to ~0.48$ per token. After only five months of initial deployment of the network to its testnet, this is a remarkable achievement.
Additionally, Chainlink has major partners to reach its ambitions in allowing smart contracts to operate in novel ways. It is working with technology banking leaders SWIFT (the largest banking network globally) to connect banks to smart contracts with Enterprise Grade Oracles, as well as partnering with startups like ZeppelinOS to provide them with the secure oracles needed to go live. Furthermore, they have been legitimized by the global research and advisory firm Gartner as a leader in smart contract design and real world implementation. Chainlink is also a partner with Market Protocol, where members are free to trade in assets as much as is done in banks.
Lastly, they are working with leading computer science academics to further increase the security of their decentralized oracle network: in November 2018, Chainlink announced its acquisition of a project called Town Crier – a hardware-based oracle. The project, out of Cornell University, works to ensure data privacy and security for smart contracts. It highlights new ways to process transactions and use encryption to verify processes without leaking any sensitive information. This acquisition is a logical step towards legitimizing the use of Chainlink as a safe gateway between smart contracts and pre-exisiting financial structures. Town Crier technology will hence be integrated into the decentralized oracle network.
ChainLink’s Future Goals:
Chainlink will continue to provide decentralized oracles, enabling permissionless development within the ecosystem, and establishing itself as the leading platform for smart contracts to interact with traditional financial mediums. There is always the need for improvement, notably the design of an ecosystem that can manage gaps in its many interconnected oracles. Chainlink vows to keep developing in an open source manner in support for the blockchain community while reaping the benefits towards a more secure and robust system that will support future innovations. Finally, Chainlink aims to extend the reach and impact of blockchain technology by making oracles increasingly secure and trustworthy – as well as increasingly available and user friendly.
Beyond Ethereum, Chainlink intends to spread its network across to Bitcoin and HyperLedger. One thing is for sure: there’s much more to come from this token.
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