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ChainLink Coin – Detailed review
When investing in virtual currency, you need to do your research. We provide you with reviews of each world top cryptocurrency out there, so that you can find the best crypto coins to invest in for you. This is a review of ChainLink Coin.
Origin & Background
ChainLink’s goal is to allow blockchains to communicate with the real world. Using a series of APIs, ChainLink is building an “Oracle” that feeds real-world information to blockchains and smart contracts.
While Ethereum has been making many technological improvements, one unresolved issue is the inability to communicate with things not on the blockchain. For example, if you wanted Ethereum to tell you the results of the most recent election, it would require someone to input that information manually. ChainLink hopes that their Oracles will eventually accomplish this task.
It can also be worth mentioning here that the international money transfer system SWIFT carried out a proof-of-concept partnership with the cryptocurrency ChainLink in June 2017. We have not however heard any information about that partnership leading to something in the future or that it is of a permanent nature.
When users want to obtain information through ChainLink, they must first submit a request contract. ChainLink uses this contract to find the appropriate Oracle to provide the information.
Each Oracle has a reputation based on its history of integrity. Multiple Oracles’ responses are pooled together to formulate a final result, which is returned to the requestor.
ChainLink operates a 3 step process to obtain the results:
1) Oracle Selection: Users specify set requirements for how they want the result to be obtained. This is known as a service level agreement (SLA). Information in the SLA may include the minimum Oracle reputation and the number of Oracles needed.
2) Data Reporting: The ChainLink Oracles report the results of the service agreement back to the contract.
3) Result Aggregation: An aggregating contract collects the data submitted by all the Oracles. The final result is a weighted average of all Oracles’ responses. The results closest to the average earn the most fees.
Due to ChainLink’s completely decentralized nature, fraudulent data reports are possible. To combat this, ChainLink requires its Oracles to obtain the data from multiple off-chain sources, such as CNN Money or Nasdaq.
Pros & Cons
We have not identified any obvious pros or cons with the ChainLink Coin.
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