Smart contracts are a major technological breakthrough that will affect our society substantially. So far, interfacing with said smart contracts is still a bit challenging for the average user. Even developers sometimes struggle to do so. This is where ChainLink comes into the picture, as it provides a fully decentralized oracle network called LINK.
ChainLink is an Interesting Venture
It is certainly true that smart contracts can make a big impact on our society as a whole, although a lot of use cases have yet to be identified. Interfacing with a smart contract on any platform is a major challenge right now. This is especially true for financial institutions and other organizations looking to explore this technology. Rather than using public blockchains, they will often develop a private and a permissioned version to use similar technologies. In the long run, these private and individual efforts still must communicate with one another, as well as with public blockchains in the future.
Connecting a smart contract to external sources is currently not possible in a convenient manner. Off-chain data and even APIs need to be introduced to smart contracts and vice versa. Currently, this is a major hindrance which can’t be resolved all that easily whatsoever. ChainLink may be the solution for all these problems in the future. That is what its developers are hoping, at least.
In fact, some new solutions are required to make this concept work in the first place. ChainLink is capable of connecting any smart contract to an external system and an API. This secure blockchain “middleware”, as the team calls it, provides the bridge for the gap between smart contracts, APIs, and any other form of external data one might need. While it may not be the perfect solution, it should be useful for at least 90% of current and future use cases.
The project revolves around a fully decentralized network of oracles which are compatible with Bitcoin and Ethereum. It is possible other blockchains will be supported in the future, but those are the two main points of focus for the time being. In a perfect future world, this new platform would allow anyone in the world to use the LINK network. All service providers would be able to securely provide smart contracts with access to key external data and potentially even off-chain payments. This latter point will be of particular interest to a lot of companies and service providers, for obvious reasons. Do keep in mind you will need LINK tokens to do so, though.
While it is commendable to see such a decentralized network, the use of proprietary tokens will not necessarily make it more appealing. This is the first solution of its kind, though, and we may see more competing services in the near future. ChainLink will certainly find its place in the market, as users can become node operators to monetize their API experience. It’s a very intriguing concept, although it remains to be seen how many companies will actually use it.