Components:
1. A simple on-chain data aggregation system
2. A more efficient off-chain consensus mechanism
What differentiates ChainLink from other oracle solutions is its ability to operate as a network.
Chainlink White Paper
For any protocol or network to become widely adopted, it needs to have flexibility. As you’ll see, it’s where Chainlink places thoughtful emphasis. Here we summarize and comment on the original Chainlink white paper, and draw some parallels to the early web.
Internet of Automation
In some cases Chainlink resembles an application layer(Google, Coinbase) or a second-layer protocol such as the World Wide Web(HTTP). Others have argued it’s more likened to the internet itself(TCP/IP). The latter being the base layer. After reading, you can decide for yourself what Chainlink is more analogous to. For now, it helps to contrast with a modern day alternative in Oraclize. Now re-branded as Provable.
Provable’s simplicity has made it the leading oracle service today, just like the Internet Gopher was a leading network in the early 90’s. Back then, it was seen as a preferable information system, avoiding the complexities of pesky HTML. It had a rigid but straight-forward menu.
Likewise, current usage of the Provable oracle service is bootstrapping continued progress, despite its initial narrow range of functionality. It has been subject to market forces and all the feedback that comes with it. Precious mind share is gathering, and a head start can make a big difference in determining what becomes the standard. Christopher Lee, professor at the University of Michigan highlights the importance of a head start in network formation:
A lot of technological adoption is simply based on past adoption. In order for complex systems (like Gopher or the Web) to perpetuate themselves, they must strike the right balance between exploring new options and exploiting their past success.
Why the Web beat Gopher in the Battle for Protocol Mind Share
Christopher Lee
Indeed, Provable has launched its 2.0 site just days before this publishing, boasting of new integrations(including Chainlink itself) and an expanded set of features.
On the other hand, Chainlink is pursuing a path of high-risk, high-reward, like the web in its early days. Chainlink is complex with many possible configurations and extensions, so it’s hard to predict how exactly it will be used. Clients and node operators will likely have their own ideas far apart from the founding team. Chainlink is lagging behind in adoption, just as the web was. The main-net is yet to be released.
Chainlink doesn’t have the advantage of a proven use track-record. However it does have considerable in other areas. Chainlink has a growing list of partnerships, staking pools, and services that are building out the network. The founding team is in the peculiar situation of having kick-started an entire ecosystem before the software release. The latest in a long line of heavyweight associates, Chainlink has caught the attention of Docusign founder Tom Gonser. In a recent interview, he postulated that the first niche companies able to adopt smart contracts will quickly force other participants to follow suit due to high cost savings. It’s a testament to the Chainlink network that Tom has singled out their solution for endorsement.
In addition to not effectively distributing its development efforts through code sharing, the Gopher team also did not play the Internet standards game as well as the Web community did.
Why the Web beat Gopher in the Battle for Protocol Mind Share
Christopher Lee
In terms of development effort, Chainlink has blown every other oracle service out of the water. Not just provable. Other oracle themed projects such as Zap, Aeternity, and Witnet are consistently lagging in Github commits and contributors. Chainlink also seems to have the standardization game covered, since it has built up every piece in a modular manner.
Intangible Advantage
Another peculiar parallel Lee mentions in his study is the self-fulfilling prophesy of viral ideas and names. Something the Chainlink community has in spades. This is particularly important since a true oracle network will require so much support and participation. Part of the problem is just getting people to think about use cases and to open up a dialogue with those that may benefit from Chainlink.
Not only acceptance of technologies but adoption of ideas. Memetics is the study of how “memes,” ideas that act like the conceptual analog to genes in biology, perpetuate themselves over time. The idea that Gopher had been replaced by the Web for example, can be explained in terms of the survival success of that idea as a meme. As the Web grew, the content it provided to users perpetuated the idea, both explicitly and implicitly.
Why the Web beat Gopher in the Battle for Protocol Mind Share
Christopher Lee
An endless deluge of memes and inside references(get your ducks in a row) hits social media on a daily basis. Chainlink punches above it’s weight in social media buzz. Despite being ranked 33 by market cap, it regularly reaches the top 10 most mentioned on forums and twitter.
@Chainlinkoracle
@theRealTXSharp
@lightningsignal
People are social animals, and names certainly matter to us. Anyone who’s purchased a high cost domain can attest to this. The Chainlink name itself is might be an asset and can tip the scale in the standardization war. Lee comments on the importance names played in the early internet days.
The developers at CERN decided on the “catchy name” World Wide Web before anyone outside of CERN was even using the system. [Cailliau] This name immediately brings to mind not only a global picture but one based on broad networks of interconnected elements. Gopher, on the other hand, was named after the University of Minnesota’s mascot. Its name was an instant reminder of Gopher’s local institutional origins. It was also often attributed to the protocols ability to allow users to burrow down into the informational hierarchy (as gophers burrow down into the earth) and the colloquial label of gopher for someone whose duty it is to go get things for his or her boss (“go fer this, go fer that”).
Why the Web beat Gopher in the Battle for Protocol Mind Share
Christopher Lee
Even Chainlink’s name rings familiar here. A “Chainlink” and a “Web” conjures up images of an inter-connected mesh. While the names oraclize, provable, and gopher all have a singular, isolated focus.
Architecture
ChainLink will initially be built on Ethereum [16], [35], but we intend for it to support all leading smart contract networks for both off-chain and cross-chain interactions. In both its on and off-chain versions, ChainLink has been designed with modularity in mind. Every piece of the ChainLink system is upgradable, so that different components can be replaced as better techniques and competing implementations arise.
Chainlink White Paper
On Chain
- User and Chainlink Smartcontract: Monitors, computes and writes to the blockchain
Off Chain
- Chainlink Core: Interface with blockchain, handle scheduling and balancing
- External Adapters: Optional, allows custom sub-tasks
Like the internet, Chainlink envisions many off-chain listing services resembling today’s DNS servers. They will keep track of available nodes in the network. Open sourced external adapters are expected to be created for customized processing just like a modern browser extension. This can offload costly on-chain computing while retaining integrity with secure enclave technology.
If you view all blockchains as the base layer protocol, then Chainlink not only connects vertically to API’s, but also horizontally to other blockchains.
Another nuanced advantage to Chainlink is its structure as a marketplace. Service level agreements are organized based on requirements. Node operators can compete based on specialization, response time, reputation, etc. In a sense, Chainlink is merely a meeting place for data providers, smart contract programmers, and clients. It explains Chainlinks heavy emphasis on compatibility with other solutions and standardization.
The ChainLink network utilizes the LINK token to pay ChainLink Node operators for the retrieval of data from off-chain data feeds, formatting of data into blockchain readable formats, off-chain computation, and uptime guarantees they provide as operators.
Chainlink White Paper
The Chainlink nodes are where the oracle decentralization happens. Of course, in some cases multiple node inputs are not desirable nor necessary. However, these users can still leverage the other features of the Chainlink network, such as standardization, confidentiality, and security.
The confidentiality and security features are ensured in large part by the Town Crier Oracle, utilizing Intel SGX(Software Guard Extension). They define private regions of memory, called enclaves, whose contents are protected and unable to be read nor saved by any process outside the enclave itself.
The Chainlink whitepaper explains what it sees as the most promising capability of SGX:
First, enclaves protect the integrity of the application, meaning its data, code, and control flow, against subversion by other processes. Second, an enclave protects the confidentiality of an application, meaning that its data, code,and execution state are opaque to other processes
Chainlink White Paper
The standardization part is felt throughout each Chanlink component. With the help of OpenZeppelin and Accord.
In part 2, we’ll delve into the infrastructure around Chainlink, get into some game theory, and compare the Chainlink SGX approach to other solutions.
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