What is Chainlink? LINK Explained with Animations (Price Prediction)

before we dig into this video let's go over a quick recap of what a smart contract is smart contracts are simply agreements written in code that are usually ran on a blockchain now you might be wondering why a blockchain well what happens on a blockchain cannot be changed so when you and someone else come up with a financial agreement to change that agreement you would have to change millions of computers all around the world it's no longer just your word versus someone else's word or an agreement written on paper it's an agreement shared with millions

of other people who have a copy of it moving on smart contracts can be as simple as if i pay you ten dollars today you'll pay me back one dollar every day for the next 10 days they can then get more complicated like if i give you ten dollars of ethereum you'll give me ten dollars of doggy coins where basically the code can actually check if both people truly have ten dollars of each token that they want to trade and then automate the trading so if one person doesn't give all ten dollars or they change

their mind the other person won't be left robbed finally financial smart contracts can be as complicated as if you give me ten dollars of usdc i'll give you eight dollars of ethereum but you have to pay me six percent yearly interest now just like addition eventually becomes the building blocks for multiplication and even exponents these simple smart contracts can easily and quickly become the backbone of an entire nation's financial system but there is one problem these smart contracts can only look at data on the blockchain they can only look at your past transactions your current

account balance or what your friend has done on the blockchain in the past inherently this limits them but what if we could bond real life data into a smart contract that way we could create something like a sports betting app where we could bet on who is going to win a game or how many points a team may win by let's use a real life example where quarterback patrick mahomes throws a 50 yard touchdown to win an nfl game a sports betting app may use smart contracts to take up bets before the game and then

at the end of the game in the traditional world at least a bookmaker would need to obtain the information about the game from a sports website to pay out the winners however in the new world of blockchain technology we don't want to rely on a single person inputting that data we don't want to put our money in the hands of a single error prone emotional by nature human what if the sports betting blockchain app had a way to gather real world data put it on the blockchain and in a way that we don't have to

rely on a single person to hopefully give the blockchain truthful data welcome to whiteboard crypto the number one youtube channel for crypto education and here we explain topics of the cryptocurrency world using analogies stories and examples so that even your grandpa could understand them in this video we're going to explain what chain link is how it works the problem that it solves as well as its tokenomics actually i've never done this before but if you stick around to the end of this video i'm going to show you how you can check out our pretty big

research guide that we've put together on chain link including some price predictions chain link aims to create a network where data providers which are also called oracles are incentivized by money to provide truthful and reliable data to a blockchain chain link is ran by oracle so it's really important that you know what an oracle is basically an oracle is a software that acts as an intermediary helping to do a two-way data transfer between smart contracts and the real world we actually have an entire video on what oracles are so we won't focus too much on

how they actually work but in this video we'll focus specifically on how chain link uses them moving on what is chain link well chain link is a decentralized network of oracles that provide data from off-chain sources to on-chain sources and vice versa it allows smart contracts to access real-world information that exists outside of the blockchain in a secure manner now chain link also tackles the reliability problems associated with using a centralized data source but we'll get to that in a little bit launched in june of 2017 chain link is the brainchild of smartcontract.com a company

co-founded by sergey nazarov and steve ellis although their innovation arrived when the crypto industry was actually booming with new projects chain link has continuously delivered on its promises coupled with plans to expand beyond just the ethereum network the chain link network acts as a bridge between the new and booming blockchain industry and the traditional administrative structures that drive economies to build more efficient secure and transparent processes and that was a little bit of jargon but we'll get into it in a minute it should be noted that chain link is an ethereum based network and is

secured by a proof-of-stake consensus algorithm oh and by the way chain-link is a blockchain that was built to actually solve a problem to put off-chain data like temperatures and stock prices or how many views this video has and then to allow blockchain smart contracts to read that data the important thing here is that this is good news for investors since many crypto tokens are unfortunately solutions looking for problems to solve moving on how does chain link work now this is a great question why because if you google it you'll find pages of really technical stuff

that most people won't understand and if you go to youtube and try to find a video that explains it well none of the videos on chain link actually explain how it worked they explained the tokenomics or what problem chain link is solving or why you should invest in it just nothing truly explaining how it actually works so that you can understand it well grab a chair because i'm about to attempt to do so now the first thing you must understand with chain link is that it is technically replacing a bunch of middlemen think about a

real estate agent nowadays a lot of people just go to a website like zillow find the house that they want and then move forward with that process opposed to hiring an agent to show them eight different houses the same is true with a travel agent they are a middleman even more so let's refer back to our sports betting example someone is collecting money on both sides of the bet and also being a referee to decide who gets the winnings well chain links oracles and the use of smart contracts will replace all of these people with

code now the way they do that is very complicated but here's how it works first off how does data get onto the chain link network the answer is node operators and this is a fancy word for someone who locks up some of their money and says i want to be a trusted source of data ask me any question now you might be wondering why do they have to lock up their money well if we can prove that they are no longer being truthful we can actually take that money from them this incentivizes them to always

tell the truth however the next question you might have is why would they take this risk in the first place here's a hint it's to earn money people pay these node operators to give them reliable and truthful outside real-world data it's a win-win situation in reality it gets a little more technical than that when someone wants a piece of data on the blockchain like maybe the weather they first have to set up something called a requesting contract which is the start of it all we're about to get into some really technical stuff so if you

grabbed that chair earlier you better sit down in it after setting up a requesting contract the chain link algorithm will register this request as an event after which it will set up a new matching smart contract known as a chain link service level agreement contract which will allow it to access data off the blockchain afterwards the service level agreement contract will create three more subcontracts a reputation contract an order matching contract and an aggregating contract we're going to go through these next first chain link's reputation contract evaluates the track record of an oracle to determine

its performance history and authenticity and then we'll basically remove a bunch of unreliable or inaccurate nodes to put it in a way that's easier to understand this contract basically checks to make sure that wherever we're getting the data from can be trusted the second contract is the order matching contract which sends the request contract's query or question to trustable nodes and then checks their bids from the list that it gets it then chooses the suitable amount and types of nodes to handle the question it should be said somewhere in here chain link converts the request

contracts question into another programming language and then it can actually go into the real world and grab data from the internet finally chain link's aggregating contract can validate data from both single and multiple sources using the previous nfl match as an example let's assume eight different nodes send one set of similar scores of the game and then another three nodes transmit a different game score while the aggregating contract will basically look at all these answers and then get rid of the ones that don't really make sense or in this case the three that transmitted a

different game score the aggregating contract can repeat the validation process for many different sources after which it reconciles them by taking an average now it is worth noting that some answers to questions cannot be an average but that's outside the scope of this video with all of these processes combined chain link seamlessly and reliably provides accurate data for smart contract execution to sum it up in a whiteboard crypto manner basically all of these contracts work together to follow this simple formula you pay chain link to go find some trustable nodes which is the reputation contract

then you give them a question that hopefully they can find the answer to and this is the order matching contract finally you let chain link aggregate all the data into a single answer which is the aggregating contract this is a good overview of how chain link actually works did i explain it well hopefully but let's move on to chain link's tokenomics first off before i get into chain links tokenomics i want to share with you a project that i've been working on basically there are millions of people out there wanting a chain-link price prediction and

then to help them make an educated guess i've actually created a chain-link price prediction webpage that hopefully will show up on the first page of google now i must say personally i do not like price predictions because they're usually inaccurate they can become self-fulfilling prophecies and they can harm a person's reputation if they're wrong so here at whiteboard crypto we have created a page for people that want price predictions but filled the page with a bunch of research before the very conservative price predictions that way it's not complete click bait the idea here is to

spoon feed anyone who wants a price prediction with enough truthful and accurate information that they themselves can accurately make an educated guess as to where the price of an asset may be going anyways if you'd like to see that huge research page we put together on chain link you can help us rank in google by searching chain link price prediction and then finding whiteboardcrypto.com's page to view it i do want to say that this page has a ton of information that we had to dig for to put together and i think you're gonna love it

anyways there's way too much stuff on that page to put into a video and it contains a lot of time-sensitive stuff so let's get back to the basic tokenomics of chain link the chain link blockchain has a native token called link and this token is used to fund the project's growth during link's ico in september of 2017 the developers stated that there would be a maximum supply of 1 billion tokens at launch when they sold some of these tokens chain link's price was 11 cents but today it trades between 20.30 representing a 20 000 increase

from the launch price at the time of making this video link has a circulating supply of over 464 million tokens which is around 46 percent of the total supply it's also worth mentioning that since the link token supply is limited it could be considered non-inflationary since an increase in demand will most likely make the price increase also chain link's white paper reveals that 35 of link's total supply will be allocated to people who help secure chain links network and actually run the oracles then another 30 will be channeled towards the development of the chain-link blockchain

and the ecosystem and the remaining 35 were sold in public sales events like the ico since chain link is a decentralized network users can leverage it to become node operators themselves and earn link tokens by handling important data related tasks that ultimately lead to the blockchain's success now in short and this is important the two main uses of link tokens are to pay the network including the oracles to give you some data and also to be used as deposit by node operators to ensure that they play nice and stay honest ending this video if you

haven't heard of our free d5 for beginners guide you should go to whiteboardcrypto.com where you can immediately enroll in it join our newsletter and find a few other custom tools that we've created and if you really want to dive into the rabbit hole of defy you can join whiteboard crypto club where you'll gain access to a private community get a sign up bonus of twenty dollars of ethereum to jumpstart your journey be able to watch some premium tutorials that i put together and be supporting the channel in our future team's work no hard sell though

the opportunity will be waiting when you're ready to learn anyways thank you guys for watching i hope that you enjoyed this video i really hope that you've learned something and most of all i hope to see you in our next video you