Chainlink is a decentralized network of oracles that enables smart contracts to securely interact with real-world data and services that exist outside of blockchain networks. With Chainlink, the traditional systems that currently power modern economies can connect to the emerging blockchain industry to generate more security, efficiency, and transparency in business and social processes.
With cryptocurrency and blockchain technology gaining mainstream attention and Chainlink establishing itself as a key component of many blockchain applications, more people are entering the industry and asking the fundamental question: what is Chainlink?
In order to help those new to blockchains, smart contracts, and oracles, we’ve created a simple overview to showcase the value of the Chainlink oracle network and how it enables blockchain technology to reach its full potential. This guide provides context on Chainlink by answering three key questions:What is the underlying value proposition of blockchains and smart contracts? Why is there an inherent limitation to smart contracts that Chainlink must help resolve? How does Chainlink’s solution unlock the full potential of smart contracts? The Value of Blockchains: Eliminate Counterparty Risk
To fully comprehend the importance of Chainlink, it’s critical to first understand the underlying value of blockchains and smart contracts. Generally, a blockchain is a decentralized network of computers that performs computation and stores data in a shared ledger. A blockchain differs from traditional, centralized computer systems in that:No single person or group controls it. Everyone in the world has equal access to send it commands. The applications running on it and the data stored in it cannot be tampered with or deleted. All transactions processed over time are recorded in a continuously growing ledger. Transactions are paid for via a native cryptocurrency.