In late 2018, when many projects had been struggling to survive, Chainlink stood out because of its steady growth and resilience in the volatile crypto market. Chainlink has been able to defy the bearish market, even though most cryptocurrencies have crashed or remained stagnant. In this article, we’ll look at how Chainlink’s innovative approach to securing and trusting the connection of blockchains to the outside world has achieved this achievement.
The issue of information exchange on the Blockchain
Through mathematical algorithms and cryptography, blockchains provide an unprecedented degree of security, trust or decentralization. However, in terms of obtaining and exchanging information with the rest of the world, isolation of all blockchains makes it difficult. Traditional methods require the trust of external sources to provide accurate data, which introduces a single failure point and compromises the fundamental principles of blockchain technology.
Chainlink, in order to bridge the gap between blockchains and real life, has emerged as a solution that retains security, confidence or decentralization. Chainlink eliminates the need for a single failure point when it obtains and delivers information on Smart Contract programs, via its network of nodes called oracles. Without sacrificing the fundamental principles of decentralization and security, this middleware has made it possible for Chainlink oracles to deliver essential data such as price feeds, event information, or connections with traditional payment systems.
The Minds Behind Chainlink
Chainlink was founded by Sergey Nazarov, the current CEO, and Steve Ellis, the current CTO. Together, they’ve come up with a solution that’s going to change the way blockchains interact with external data sources.
A Journey Through Time
There are several milestones that can be traced back to the development of Chainlink:
- September 2017 : ChainLink raised $32 million through the Initial Coin Offering, generating 1 billion LINK Tokens.
- November 2018 : Chainlink purchased the TownCrier, increasing its capacity and extending its reach.
- May 2019 : The Chainlink project, a major step forward in its vision, has achieved successful deployment on the Ethereum Mainnet.
The Unique Value Proposition of Chainlink
The value of Chainlink lies in its ability to address security vulnerabilities that arise from the interaction between a blockchain and an outside world. Chainlink mitigates the risk of manipulation, compromise or falsification by securing points where data will enter the blockchain. Three main principles are emphasized in the whitepaper: distribution of information sources, provisioning of oracles and use of reliable hardware. These principles ensure the reliability and integrity of data within the Chainlink ecosystem.
The Power of Partnerships
The robust list of partners that includes leading stakeholders from both the crypto and traditional business sectors, is an excellent example of Chainlink’s practical use case. The trust and confidence placed in the capabilities of Chainlink are demonstrated by its partners, such as Polkadot, Synthetix, SWIFT or Google. As a result, SWIFT is leveraging Chainlink to simplify seamless interactions among traditional and cryptoworlds so as to enable security money transfers and proof of payment receipt.
Chainlink has emerged as a leading solution for securely and reliably connecting blockchains with external data sources. Chainlink has redefined how information is exchanged between blockchains and the real world by building a decentralized network of oracles. Chainlink’s commitment to security, trust and decentralization has earned the confidence of both crypto communities and traditional companies as a key infrastructure element in shaping future smart contracts and decentralized applications.
Tran, K. C. (2020, May 1). What is Chainlink? A 3-minute guide to Blockchain’s data provider. Decrypt. https://decrypt.co/resources/what-is-chainlink