/biz/ - Business & Finance

>>13230779
>>13231098
2/2


So now you have a third party involved to trigger the contract, what incentive is there for the third party to stay honest? This is where the term "node operator" and "staking" comes into play. Someone who contributes to a decentralized network is refereed to as a node. For example, people who hash, or "mine", bitcoins are considered bitcoin nodes. For chainlink, a node operator would be a user who is providing data onto contracts.

Now Staking. This is where you precious link tokens come into play. Back to our first example, both Party A and Party B have set up a smart contract with a trusted third party to facilitate contract execution, there must be an incentive for the trusted third party to stay honest and provide legitimate data. As a Link Node operator, you will have to provide collateral to act as insurance in case the contract executes improperly due to faulty data. Anytime you accept a job as a chainlink oracle, Party A and Party B are going to want your capital on the line to keep you honest throughout the process. If there was no staking on the network, a node operator can simply sybil it with no repercussions.

as far as a node operator making money from this process, Party A and Party B agree to pay X amount of money to the third party should the contract execute properly. That money is distributed to you or distributed to a network of decentralized nodes depending on if the contract required 1,2,3,4,5 etc. amount of nodes, under the assumption that more nodes=more security=higher fees.

Hope you have a better understanding of it now.

>>12750284
Be careful swing trading your links.
You wouldn't want to be the one that missed out, would you?