Beginners Guide To Chainlink In Plain English

Chainlink is an oracle network.

Not Oracle the database company.

An oracle is a source of trusted real-world data in a format that blockchains can understand. In computer science terms, an oracle is an entity capable of answering a collection of questions. An example of an oracle source would be an official births and deaths register.

How would this be used?

Let’s say some wealthy benefactor who owns Bitcoin leaves you their Bitcoin in their will. They had setup a smart contract whereby when they die, a contract will execute and their Bitcoin would transfer to you. How does the smart contract know the wealthy benefactor has died? It pulls data from the trusted births and deaths oracle.

Chainlink sits in between real world offline data, like a deaths register, and blockchains. It can do some pretty clever stuff, including verifying oracle data from multiple sources to check that it is accurate.

It uses a cryptocurrency to pay for this service, called LINK.

 How do you buy LINK? You can do so on the following exchanges: 

What Is LINK?

Like bitcoin and ETH, Link is a cryptocurrency. A cryptocurrency is a digital currency secured by cryptography.

LINK isn’t a coin. It isn’t a note or a bar of metal. LINK takes the form of a number and it resides in computers. You can send it to someone else just as easily as you send an email. The main use of LINK is to pay for the verification and provision of oracle data.

Why does it have value? 

LINK has value because people choose to give it value. That’s also true of art, precious metals and currency. It can be worth a lot or a little, depending on the value people choose to give it.

Why is LINK attractive as an investment? 

LINK powers smart contracts. These contracts need real-world information in order to execute and Chainlink provide this data in a secure and transparent way.  As the use of smart contracts grow, they require verified sources of data and Chainlink will provide that service.

At this point, LINK is a highly speculative investment class. Investors should consult an investment advisor before making investments decision and risk no more than they can afford to lose.

Further Reading: