One of the most exciting developments in the world of Blockchains was the introduction of smart contracts. There was an immediate problem with the implementation of these smart contracts, namely that blockchain could not operate outside their own infrastructure.
There was clearly a need for an intermediary who could deliver the information of the off-chain world (such as stock exchanges, banks, companies) real-time and decentralized to the on-chain world of smart contracts. Chain Link is the first Blockchain that wants to accomplish this task, and with a large number of partners (Swift, Gartner, Cornell etc.) and a professional team it starts to become a reality sooner.
There is currently no way to buy LINK directly. So the only way to buy LINK is to purchase BTC to use on an exchange, and then switch it to LINK.
Step 1: Choose Your Trading Platform
Firstly you will need to decide on your cryptocurrency trading platform and create an account there. The choice of platform isn’t very important as a beginner, what really matters is a trading platform that you are comfortable using..
Choose one of these platforms and complete the follow steps to get started:
Go to Binance and create a new account if you do not already have one.
Once your account has been confirmed, log in to your Binance account and click on funds at the top right, then “Deposits Withdrawal”.
Look in the “Bitcoin” list and click the Bitcoin deposit button. Then a series of numbers appears in the “BTC Deposit Address:” field. You must copy this series for the next step. This is your bitcoin wallet address.
STEP 2: BUY BTC
The second step is to get your Bitcoin, you can do that at a broker such as BTCdirect .
If you’re buying BTC for the first time from these brokers, you will be asked to confirm your bank account.
Upon payment you will be asked to enter a bitcoin address. You must fill in the address that you have copied at Binance.
STEP 3: WAIT UNTIL YOUR BTC HAS ARRIVED
Once you have purchased Bitcoin and entered the correct BTC deposit address with the payment, you have to wait until the BTC arrives in your wallet.
This process can take up to ½ hour, so don’t worry if it’s not immediately visible on the exchange.
STEP 4: BUY LINK
Once your Bitcoin has arrived at your trading platform, it’s time to buy some LINK.
Go to the Binance trading exchange (click the top left on exchange and choose Basic) and use the search function within BTC Markets to find the LINK/BTC trade.
Once on the LINK/BTC trade page you can look in the left box marked with Buy LINK. Here you can decide how much LINK you want to buy using your Bitcoin.
If you then press Buy LINK your order will be placed. When the order is filled you will see your number of LINK on the right-hand box or on your balance page.
Congratulations you’re now the proud owner of LINK.
What is Chainlink?
Chainlink is described by its developers as a secure blockchain middleware. Chainlink aims to connect “smart contracts” with all kinds of blockchains. Chainlink wants to achieve this by giving smart contracts access to off-chain sources such as Web APIs, data feeds and traditional bank transactions.
A smart contract is a computer application that is executed on a decentralized infrastructure. These smart contracts are executed as soon as the contractual relationship is complete or the certain number of circumstances are present.
In other words, Chainlink is a blockchain that focuses on the connectivity between blockchains and other off-chain applications. Think as an example of an Ethereum smart contract that has to make a payment on PayPal.
Unlike a traditional contract, no party can change the code or contract and thus disrupt the execution. creating a kind of relationship that does not depend on trust in one of the parties.
This is currently much more difficult than it sounds because a smart contract from Ethereum has no compatibility with the PayPal API. Chainlink can serve an intermediate blockchain so that this smart contract can be made flawlessly and can be completed.
The developers behind Chainlink believe that even smart contracts are revolutionary for many business sectors. These contracts are not yet able to communicate effectively with systems outside their blockchain network. Making it very difficult for the business world to use smart contracts.
The Chainlink Ecosystem revolves around the LINK cryptocurrency and the LINK network. The Chainlink team wants to offer an applicable and useful form of smart contracts to the business world with the aid of APIs and other similar means.
What are Oracles
One of the major drawbacks of the current infrastructure of smart contracts is that these contracts are based on information secured in the blockchain. By the way a consensus is reached (more on this topic here ) in a blockchain with the help of the miners an interaction from outside is not possible with data feeds.
One way to solve this problem is by using a blockchain middleware called Oracle. An Oracle is important because blockchains are unable to get direct information outside of their own network. Oracles are currently translating information in two ways. The first method uses a notarisation system, which is periodically updated. The second method uses manual input.
The developers of Chainlink soon came to the conclusion that this solution was far from ideal. The first method is recursive, while the second is much higher in terms of costs.
In addition, both options do not use the philosophy of a blockchain, which is still a decentralized, trustless system. This means that the essence of a smart contract can not be maintained as well.
Suggest a smart contract that is capitalized on the basis of a share value. The value of the share is passed on manually but it appears to have been entered incorrectly. Then the smart contract will be activated as yet.
Chainlink developers saw that an Oracle blockchain was needed that adhered to the philosophy of a blockchain, that was decentralized and trustless.
Chainlink offers everyone the option to deliver their data feed or API directly to the smart contracts in exchange for Chainlink tokens (= LINK). Such a person is referred to as Node operators within the Chainlink network. Through LINK Node operators are able to sell their API and other data information directly to smart contracts. This results in a decentralized infrastructure that can not only interact with everything outside the blockchain, but is also scalable and safe and above all trustless.
How does Chainlink work?
Within Chainlink there are two components, the on-chain and off-chain. Where LINK is the gasoline of the network. Data providers are paid LINK while people who need them deliver the LINK for the intermediate step.
The on-chain component of Chainlink is concerned with filtering the Oracles looking for the data requested by a certain party’s smart contract.
This is done with the help of SLA (Service level agreement) whereby the Chainlink network collects and sorts all Oracle queries based on its own model. Finally, this collection is delivered as a collective Chainlink query to the smart contract.
The off-chain component of Chainlink consists of Oracle nodes that are connected to the Ethereum network. This component independently collects all data from various off-chain nodes. These off-chain nodes can come from multiple industries.
For example, a dairy can supply a node with real-time sales prices for their products, or a share trading that passes on the exact prices to the node. Chainlink plays the decentralised catalyst that plays the independent bridge for smart contracts at low cost.