What is Chainlink?
Chainlink is a decentralized network of oracles that provide external data and other off-chain resources to smart contracts. These oracles act as a bridge between the blockchain and the outside world, allowing smart contracts to access external data and interact with off-chain resources.
Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. They are often used to automate the execution of certain tasks or to facilitate the exchange of assets. However, they are limited in their capabilities because they can only operate within the constraints of the blockchain and can only access data that is stored on-chain. This is where oracles come in.
Oracles provide smart contracts with access to external data and other off-chain resources, allowing them to be more useful and practical for a wide range of applications. For example, a smart contract could be used to automatically pay out insurance claims when certain conditions are met, such as the weather reaching a certain temperature or a sports team winning a game. Oracles can provide the smart contract with the necessary external data, such as weather data or sports scores, to allow it to execute the terms of the contract.
Chainlink is a decentralized oracle network that allows multiple oracles to securely provide external data and other off-chain resources to smart contracts. It uses a decentralized network of nodes to ensure the integrity and reliability of the data being provided to the smart contracts. This ensures that the smart contracts can trust the data being provided to them and can execute accurately based on that data.
Overall, Chainlink enables smart contracts to interact with real-world data, events, and other off-chain systems, making them more useful and practical for a wide range of applications.
Chainlink was founded by Sergey Nazarov and Steve Ellis. It was initially funded through a seed funding round, which included investments from blockchain investment firms such as Fenbushi Capital, Multicoin Capital, and Bain Capital Ventures. The company has also raised funds through the sale of its native token, LINK, which is used to pay node operators for the provision of external data and other off-chain resources to smart contracts on the Chainlink network.