What Is Chainlink and How Is It Currently Used?

Blockchains are designed to be highly secure and self-contained ecosystems, meaning they struggle along to connect with external resources like APIs and data services for real-world event verifications. This is where the oracle issue comes in, and its the primary barrier preventing everyday contracts operating on blockchain infrastructures. Fortunately, theres a way to jump over the issue by using hybrid smart contracts, which use oracles to retrieve off-chain data. The oracle forms a link to the outside world, but it also secures any data passed through. The most well-known oracle in the blockchain space is Chainlink, which is what we are here to discuss below.

What Is Chainlink?

Chainlink, which is currently priced at $5.96, is the most adopted oracle and is used by countless Defi solutions to secure billions of dollars. Instead of running one oracle network, Chainlink utilizes several parallel networks, which increases service capacity without causing cross-dependencies with external oracles.

The end goal for Chainlink is to allow developers to construct any number of oracles, for example, reputation services, payment penalties, multiple notes, data sources, and aggregation methods. The versatility of the solution has allowed for a number of use cases to emerge, which we have outlined below. However, you can learn more about Chainlink by following the link, where you will find a high-quality Chainlink abridged report.

Government Uses

The majority of society will rarely agree on a given topic, but thats not the case when it comes to creating a transparent world, where institutions have accountability. Blockchain has paved the way for new infrastructures to be built, which would track government processes and use smart contracts to eliminate tampering efforts. By using an oracle, these new tracking platforms can be linked to real-time data, which would avoid the need for centralized interpretations. The following are examples of oracle use cases within the government:

• Voting. The 14th December 2021 vote, which saw Joe Biden take office, was shrouded in vote tampering claims - further highlighting how insecure the current vote system is. Blockchain provides a potential solution, where private keys are used to access voting and oracles are used to verify identification. Once votes are cast on the chain, they are encrypted and can never be hacked or changed.
• Regulation. Governments have little control over blockchains in their basic form. However, oracles can be used to manipulate smart contracts and force government authorization before completion - read this case study for an example.
• Certificates, Permits, and Deeds. Smart contracts can be utilized to add greater transparency to government issues certifications. Additionally, Chainlink can be used to ensure privacy when verifying identities, thanks to its acquisition of privacy-preserving oracle DECO.

 Identity and Authorization

Blockchains are inherently designed for anonymity, but there is a growing need for identity verification to be combined with blockchain solutions. By using Chainlink oracles, identity pools including government databases and social media profiles can be used to prove on-chain identities. This is essential for following government regulations - you can find useful examples below.

• Biometrics. Smart contracts can be verified through biometrics, which is a popular feature on smartphones and other devices. Providing there&rsquos a reputable identity database, Chainlink&rsquos oracles can pull data on-chain.
• E-signatures. Digital signatures are readily available through platforms like Adobe, but they are pretty easy to forge, especially as Adobe saves signatures for future applications. Chainlink oracles can improve Adobe and DocuSign processes, guaranteeing the security of e-signatures.
• KYC/AML. Know Your Customer and Anti-Money Laundering laws require additional features to be added to blockchain technology, especially where finance is concerned. Fortunately, Chainlink oracles can bring personal financial histories and identities into the blockchain, while staying 100% secure.

Utilities

Utilities like energy, internet, and water make the world turn, so there is no surprise blockchains and oracles can be used within this industry. Managing utilities is essential for the health of society, yet they currently rely on outdated infrastructures centered around business dynamics. However, through integration with smart contracts, utility management can move towards a more transparent and automated means of operation - see these use cases:

• Water. The water network is monitored to ensure homes are constantly connected with a healthy supply. Using IoT devices, water consumption, and quality can be tracked remotely. If these devices are integrated with Chainlink, smart contracts could generate usage invoices, issue penalties, and release emergency funds.
• Energy. Energy providers are responsible for maintaining electrical grids, but they are currently under fire amidst the rising bill costs. However, the Chainlink oracle can filter real-time usage metrics into smart contracts, which can issue penalties when households use more than projected or agreed. Blockchain-based energy market Dipole is already integrating Chainlink.
• Internet. The majority of internet packages are based on fixed pricing, even though some people use much less data, which feels unfair. With the introduction of Chainlink, ISPs can monitor real-time usage and charge accordingly by applying smart contracts. This would work both ways, as customers wouldn nott have to pay for any downtime or insufficient services.
• Emissions and Waste. smart contracts and IoT infrastructures have the ability to revolutionize the waste disposal industry. For example, Chainlink can measure waste in real-time and can trigger payments to regulatory bodies for over usage or unnecessary waste.
• Credentials. Blockchain solutions are revolutionary, but they&rsquore open to proof of credential issues without external support. Using Chainlink, blockchain solutions can obtain information regarding sufficient funds, property keys, and much more. Once external criteria have been met, on-chain smart contracts will activate. 

Conclusion

Chainlink is the perfect connection for blockchain developers to reach external services while maintaining the integrity of high security and transparency. The parallel network infrastructure allows Chainlink to be used in practically any industry, and the areas discussed above barely scratch the surface. However, they provide a solid foundation for any developer looking for innovation with blockchain solutions. As more businesses realize the power of blockchain tech, Chainlink&rsquos application and value will explode, making LINK a worthwhile investment (some predictions place it in the region of $250 by the end of 2030).