Chainlink is a cryptocurrency that aims to promote a global network of computers to provide reliable, real-world data to smart contracts running above blockchains. Chainlink serves with a decentralized oracle network and uses different nodes to obtain the requested data. These nodes form a consensus before transmitting data to the smart contract. In this way, the smart contract is not based on a single oracle. In addition, Chainlink nodes can perform both one-time and multiple data retrieval tasks. Data intake can be scheduled, which turns Chainlink nodes into a kind of "data feed" for smart contracts.
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The Chainlink network has two interactive parts: On-chain and off-chain components.
Chainlink contracts consist of three parts; reputation agreement, order matching agreement, and picking agreement.
While these contracts are running, Chainlink's on-chain unit follows a three-step process:
The second critical part of the Chainlink architecture consists of off-chain oracle nodes connecting to the Ethereum network. These nodes collect the responses to external requests. Individual responses are summarized by various consensus mechanisms and then translated into a single, reliable global response and contract. The data collected is processed through Chainlink Core, which is the very important component that connects blockchain and off-chain data sources. Chainlink Core is the device that translates off-chain data and sends it to an oracle on the chain. Chainlink nodes are installed alongside public blockchains and private corporate networks. The main task of the Chainlink network is to make it possible to run these nodes in a decentralized way.
Chainlink transaction confirmations are provided by Ethereum miners.
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