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/biz/ - Business & Finance

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55039342 No.55039342 [Reply] [Original]

Imagine you're building a smart contract on a blockchain platform, and you want it to interact with the real world, specifically to obtain accurate and reliable data. In this case, let's focus on pricing information. This is where Chainlink comes into the picture as a decentralized Oracle service.

So, what is an Oracle? In ancient times, oracles were people who acted as intermediaries between humans and the gods, providing knowledge and guidance. In the context of blockchain, an Oracle serves a similar purpose, acting as a bridge between the on-chain world and the off-chain world

>> No.55039352
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Chainlink is a decentralized Oracle network that connects smart contracts with real-world data sources and APIs. It ensures that the data entering the blockchain is trustworthy, reliable, and tamper-proof. Now, how does it achieve that? Let's break it down.

First, Chainlink uses a decentralized network of nodes known as "Chainlink Oracles." These nodes are operated by various independent parties called "Node Operators." Each Node Operator runs a Chainlink node and contributes to the network by retrieving data from external sources.

>> No.55039357
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When a smart contract needs specific data, it sends a request to the Chainlink Oracle network. The request specifies the data it requires and any additional conditions or parameters. Now, here's where it gets interesting.

The Chainlink Oracle network acts as an aggregator of data from multiple sources. It collects data from various data providers, such as premium data providers, APIs, and even traditional web sources. This approach ensures that there's no single point of failure or single source of truth, making the system more robust and resistant to manipulation

>> No.55039368
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Once the data is collected, Chainlink Oracles validate and verify the authenticity of the data using cryptographic proofs. These proofs enable the smart contract to verify that the data has not been tampered with during transmission. By doing so, Chainlink ensures the integrity and reliability of the data used in the smart contract.

Moreover, Chainlink implements a unique mechanism called "decentralized consensus." This means that multiple Chainlink Oracles independently retrieve and provide the same data. By comparing and aggregating these multiple responses, the system can identify any outliers or inaccuracies and filter them out, ensuring the most accurate and reliable data is used.

>> No.55039369
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2 in the pink, 1 in the link

>> No.55039379
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Now, you might wonder how Chainlink incentivizes these Node Operators to provide accurate data and behave honestly. Well, that's where LINK tokens come into play. LINK is the native cryptocurrency of the Chainlink network. Node Operators are required to stake a certain amount of LINK tokens as collateral to ensure their good behavior. If a node provides incorrect or malicious data, it can be penalized by losing some of its staked tokens.

By combining these elements – decentralized nodes, multiple data sources, cryptographic proofs, and economic incentives – Chainlink creates a robust and reliable system for fetching real-world data into smart contracts.
It ensures that smart contracts can access accurate and trustworthy pricing information, critical for various use cases such as decentralized finance, supply chain management, options contracts, insurance contracts, and more.

>> No.55039389
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In summary, Chainlink's decentralized Oracle service acts as a bridge between the blockchain and the real world. It retrieves and verifies data from multiple sources, using cryptographic proofs and decentralized consensus to ensure accuracy and integrity. By doing so, Chainlink empowers smart contracts to make informed decisions based on real-world events and data.

>> No.55039440

pissed fudders incoming (based threads upset them)
>never going to sell my chainlink tokens

>> No.55039447

Wow, why was this never explained before
Thank you anon. I'm going to buy some chainlink now.

>> No.55039451

I hope this doesn't bite me in the ass like all the TOMB forks I got myself involved with.

First fell for bitconnect, and then my tomb fork saga. Third time is the charm.

I know I can make it with Chainlink. Guys, expect many more Chainlink threads from me moving forward.

I become a true believer now.

>> No.55039593
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I never really understood it either, even though I brought LINk when it was 50 cents because of the memes. I had tried reading the white paper 2.0 but it was just too dense. ChatGPT read it for me and generated this explaination. I tried a few different ways to get it to explain simply. Ironically this text was from the 3.5 version, which was better than the GPT4 version generated from the same prompt, and better than Bard, Bing etc.

>> No.55039917
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>In ancient times, oracles were people who acted as intermediaries between humans and the gods, providing knowledge and guidance.
I prefer the Egyptian style of Oracle.
Same idea but without the person.
>An oracle was a request to a deity to answer some practical question through its public statue.
>Oracles were most effective when a "yes-no" question was asked. Questions could include "who has done or will do something", or "what are the chances for achieving this plan."
>Kings were chosen, nobles were appointed, thieves made to confess their guilt, legal disputes settled, crops were planted, sometimes by the "yes" or "no" from the Deity of choice.
>To be successful, the oracular process had to be carried out without any influence along the route. Therefore the path had to be carefully prepared and protected, in order to be pure.
>Not all Egyptians took their oracles as truth the first time. One man who was a thief consulted three oracles hoping to find at least one who would possibly declare him innocentbut alas, he finally had to admit his guilt.

>> No.55040736
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Wow, the first automated randomized smart contract.

And now Chainlink can provide provable randomness to mimic this, and other forms of divine gambling.

>> No.55040981

great summary. you should also mention that these price feeds are free to use, that's the primary reason they are in such widespread use after all