ChainLink (LINK)

Simple Explanation - ChainLink was created to help the blockchain know information from the world that can affect currency. The information that can affect currency couldn’t be placed in one area of the blockchain because then only one block of information would be impacted, instead it had to be transmitted through all of the connected blocks. ChainLink utilized smart contracts to transmit this information throughout all of the blocks. Smart contracts remove all human error, by programming an outcome dependent on what is occurring.

A crypto experts explanation - ChainLink is a decentralized oracle network that was built as a bridge to overcome blockchains limitations. Blockchains limit the input data that can be accepted, which is great for security but limits the input data that can be accepted. The developers at ChainLink recognized that there was a need to help the blockchain systems input real world information happening outside of the blockchain while maintaining the security that is inherent to blockchains. This information could not come from a single source, as this would have made the data centralized which is a direct contradiction of the nature of blockchain. ChainLink provides input on market influencers, such as fiat currencies, credit cards, weather, etc., on a variety of external sources of data by using smart contracts. These smart contracts exist to help the system respond to the wider range of input, such as if A occurs or B. ChainLink was launched on the Ethereum blockchain due to the ability to process wider ranges of input, but it is meant to be able to work with other blockchains as well. As an oracle network, ChainLink will lead to long-term stability and viability for cryptocurrency. The ticker symbol for ChainLink is LINK, an ERC-677 token, which was made specifically for ChainLink. ERC223 is an ERC token standard that allows token transfers to behave exactly as ERC20 or Ether transactions. ERC223 utilizes event handling which considers a transaction as an event to prevent tokens from being lost in unhandled transactions. Being the only coin with the utility aspect of ChainLink coded into it, LINK tokens are the digital asset token that is used to pay for services on ChainLinks network. LINK tokens are given when a node is established on ChainLinks networks and are staked to use as either collateral until a contract is fulfilled, or as a penalty in case the node feeds a smart contract bad data. By utilizing LINK tokens for collateral, developers of smart contracts bear no cost if the contract created fails, more LINK is being mined and the network is being utilized more thus increasing the value of the LINK token. This allows LINK to be leveraged for further development inside ChainLink and users to earn additional tokens.