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What is chainlink?

Let’s say you do side hustles? You are a video editor, and you charge $400 for each video you have edited and produced. If you had a contract , you would ask your client to deposit $400 into an escrow account, once the work is done the $400 is released to you. You will get paid in full Automatically, this is chainlink in action. Both parties you and your client cannot just arbitrary break the contract. The technical way to explain this is that chain link will take the information that’s outside of the blockchain applications and puts it on a chain. Chain link will take this real-world data and Trigger smart contracts. this may not make a lot of sense because there’s a whole bunch of very difficult words to understand.

What are some real life examples?

Let’s say you have an insurance that protect Farmers when there is no rain during that season so farmers will be paid out automatically when the rainfall levels are low, another words an automatic drought insurance chain-link. So instead of having to hire a payroll Clerk, you can apply a chain-link and have the employees get paid automatically. What if you have a lottery sporting event, the winner will automatically get the jackpot. With the help of chainlink. This can happen using chain-link The best way to do this is explained using a real life scenario. Let’s say you’re going to impose a penalty of 5% for every hour that the ice cream truck arrives late to the ice cream parlour! you would be using chain-link. The temperature sensor would need to communicate to the chainlink For the contract to do what it’s meant to do. This external change of information is called in Oracle.

What is a blockchain oracle?

Let’s say you have an insurance that protect Farmers when there is no rain during that season so farmers will be paid out automatically when the rainfall levels are low, another words an automatic drought insurance chain-link. So instead of having to hire a payroll Clerk, you can apply a chain-link and have the employees get paid automatically. What if you have a lottery sporting event, the winner will automatically get the jackpot. With the help of chainlink. This can happen using chain-link The best way to do this is explained using a real life scenario. Let’s say you’re going to impose a penalty of 5% for every hour that the ice cream truck arrives late to the ice cream parlour! you would be using chain-link. The temperature sensor would need to communicate to the chainlink For the contract to do what it’s meant to do. This external change of information is called in Oracle.

What If You are Sending XRP and the price goes up and down by the seconds?

We are sending a variable not a constant, the variable is the price of XRP that moment in time, we have a node called the API, WE ask the API to find the price of xrp send it over to you, now when every other node goes to validate that transaction, what happens next? If you call the API 5 Seconds later, the API can be compromised or hacked, now all the nodes can not validate the transaction. Chainlink lets us add API CALLS to these transactions, no nodes will agree with each other what the actual. So now we need a mechanism to agree on a data value is called Consensus. I don’t mean to get too complex, you have heard of proof of stake and proof of work. Having Consensus is the key point that makes blockchain work.

Why do we need blockchain and smart contracts to connect with paypal, visa, credit card?

We need to get the price or XRP, Ethereum and other crypto assets. we need get weather information to get decentralized crop insurance contract. We need all this information to fully utilize blockchain to its full potential.  Chainlink needs to get price information from places like NYSE, or payment information from PayPal to be delivered to a blockchain network. We need to use oracles, because it is a gateway for us to gather specific information which is tied to the blockchain. Then the smart contracts are built to work on special information streaming from the data feed.  

How do we bridge this world?

This is where oracle comes in to play. An oracle is a third party source of data that you have to have reliability in. This data is used to carry out business logical actions on the blockchain based on what is already programed in the smart contract 

Oracles for beginners

Oracles can be utilized to fetch and verify data which originates from the  outside of a blockchain. This has inroads into the blockchain industry and are making oracles a more popular topic in the space.

What types of oracles are there?

There are 5 of them: software or deterministic, hardware, inbound and outbound and consensus based oracles. Using Chainlink and blockchain oracles, the problem in a fully decentralized plan is resolved. This allows for tamperproof and unhackable situation producing top notch smart contract.

Is the decentralized oracle based on Ethereum?

Yes the oracle service is at the moment based on Ethereum and developers can build blockchain solutions in the everyday business we carry out everyday

How does Chainlink function?

ChainLink operates by intertwining the blockchain ecosystem to outside applications. On one end from the start of the chain, it connects first to the blockchain, and on the other, it is integrated with an API key. The solution’s foundation is built on oracles, which assist in limiting trust in a single party and work ceaselessly in a decentralized infrastructure. You are probably wondering what did you just say?

Smart Contract simplifed?

Smart contracts allow you to make transactions without the need for third-parties, thereby eliminating the need for trust issues or  human error. Smart contracts CAN be and used and implemented with innovative ideas without the need to transfer real-world currencies. Smart contracts are similar to software applications on the internet.

A smart contract is basically a program that contains code, offering trustless execution on the blockchain. These contracts help in removing intermediaries (Third party Google, Banks, lawyers) and transaction friction.

Give an Example of real life application?

For example. I buy a computer game or i create a piece of digital art (NFT), GOLD or a trading crypto robot from the developer.  Because it’s in a smart contract, If me the buyer is not happy, the money is not released. You can’t get ripped off. 

How many Chainlink do you to buy to become a millionaire ?

At this time if writing and this number will change, there are approx 452994 unique folks who hold chainlink in their wallets.  The challenge as bitcoin is a payment system. In the bitcoin blockchain in its own little universe, it will only allow payment beautifully. ETHEREUM has its own little universe, it will smart contracts. The challenge with ethereum is that 80% of real world smart contracts real uses will need outside data for that live data to come in. Chainlink has solved that problem. To bring in real world real time data to the block chain to activate it. But Chainlink is not just allowing data to come in but chainlink also verifies the data to see if it is real or false data. So Bitcoin shook up the financial world 11 years ago, it went up from a few cents to as high as $72,300.00CDN (price march 30/2021) for 1 bitcoin now at the time of writing. Now ethereum went from a few dollars to now $4,200 USD (MAY/10/21) for 1 ethereum. Most people only know that bitcoin went from $1000 to $20,000 in 2017. A lot of people don’t know that ethereum went from a few dollars to $1,400 END OF 2017.

Does Chainlink solve a problem that both Bitcoin and Ethereum can’t?

YES, Chainlink is going to be the the 4th step or the industrial revolution. It solves the big problem that bitcoin and ethereum can not do. They do not allow the data to come into the blockchain. Chainlink has so many partnerships and projects you have heard of intel, etc. What it does is has an ecosystem to verifiy the data. What that does is that it makes chainlink the data provider in the blockchain. It allows for fast verified transactions.   Chainlink is solving an existential problem, which is the economics of the BTC network is so inefficient as most of the transactions can be in a faster USING chainlink, rather than waiting. What that does is takes away a problem for the Bitcoin network.

Do you need to store your seed password on chainlink?

Yes, here are some cold storage Chainlink wallets: Trezor, Nano ledger, Keepkey.  This is what we recommend for you not to store you Chainlink tokens on Metamask (chrome or firefox browser). This is where you will have to take extra caution because every time you create a new wallet, a new password will be required. To be sure, you will need to store your passwords in a password manager application which will help you to generate strong passwords.

What to look for on a Chainlink wallet?

Although all these chainlink wallets are free: Metamask, myetherwallet, Exodus, coinnomi. Free doesn’t mean it’s good. For example, Exodus charges a fee. Here is a list of things you want to keep in mind.

  1. LINK compatibility – LINK is an ERC20 token on the Ethereum blockchain. You need to make sure that storing Ether (ETH) as well as any ERC20 token and chainlink is supported
  2. Can you control your private keys.  If you get a cold storage wallet, you can, but if you leave your Chainlink on an exchange and the exchange gets hacked you lose all your chainlink. 
  3. Verify that your chainlink community is active and they will maintain their wallet and do software upgrades. 
  4. Backup & security features – make sure like I mentioned above that you do a back up of your seed words and your PIN.

Can people track my Chainlink Transactions?

Another advantage of the Chainlink token is that it is a privacy-oriented token. This means that no one will be able to track your transactions using the Chainlink token.This will help you to avoid the need for multiple forms of account.  As you make transactions with Chainlink tokens, you will be able to remain anonymous.

What can you do with Chainlink tokens?

Chainlink is an ERC677 token that acquires functionality from the ERC20 token standard. The chainlink token is used to pay the node operators for fetching the data for smart contracts. As well as paying for the deposit that the node operators make. You will be able to use your chainlink wallet with online stores that allow payments using Chainlink tokens. You will be able to link trading platforms that will offer various options to trade with Chainlink tokens. All of these activities will allow you to take advantage of the Chainlink tokens’ rate and options of transactions. One of the applications will allow you to start small and build your link portfolio.

Source: https://bloxy.info/token_holders/0x514910771af9ca656af840dff83e8264ecf986ca

 

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