Chainlink is a decentralized oracle network used to manage blockchain smart contracts. LINK is a ERC677, which is an extension of ERC20. The LINK token is a way to connect external sources of information with public blockchains through software. The original solution was heavily reliant on a centralized system, which was a big flaw. The team decided to move to a decentralized model called Chainlink with multiple nodes verifying the source of information.
What is Chainlink?
Chainlink is an Ethereum-based decentralized oracle network. It aims to connect external sources of information with public blockchains using software. This essentially means that Chainlink connects people or entities that are trusted with know-how with a public blockchain to publish information and receive the tokens that are used to pay for their services.
Originally, Chainlink was built to connect people to external websites. It is also possible to connect with online retailers who would supply you with items you like to purchase or make recommendations based on your interests. Chainlink will allow for the creation of value in the form of smart contracts based on real-world interactions.
The Link Network
Now we know about the LINK Token, let us understand its Network in more detail.
The LINK Network consists of three main components:
- Network Operators
- Channel Operators
- Non-profit foundations and open source projects that use Chainlink
- Network Operators
- A Network Operator is the service provider for a Chainlink network.
What is LINK?
Chainlink offers smart contracts that connect external data to the decentralized oracle network. A blockchain is a collection of blocks that have a block number that is linked to a public ledger. There is a first block and every subsequent block will either be a single transaction or a new block.
Smart contracts are records of rules and conditions that are stored in blocks that are linked together in a chain. Each block in a chain is linked to a unique identifier. Smart contracts are used to automate processes, which can include smart contracts in some cases. The smart contract is a set of rules that run on a blockchain.
The Link network uses the LINK token as a method of payment.
How to use Chainlink
The developer team behind LINK is currently finalizing two SDKs, Chainlink Elements SDK (for developers) and Chainlink Status SDK (for enterprises). They have already released the Release Candidate of Chainlink Elements SDK and Chainlink Status SDK. Developers will be able to use Chainlink Elements SDK to build applications on the LINK network. It can be used to create social, collaboration, e-commerce, gaming and video streaming apps on the blockchain.