Thread by @ChainLinkGod

The key value of #Blockchain is immutable state and censorship-resistant access to that state

Unfortunately state changes are limited to direct user inputs, which isn't ideal for contracts that affect multiple parties

This space is still missing the other half of the equation

What we're missing is a trust-minimized and provably secure off-chain agent that can reliably trigger a state change on the behalf of the contract's beneficiaries

Importantly, that state change can be based off of the real world data ALL traditional real-world contracts require

I think you know what I'm getting at

>>> Oracles <<<

The vast majority of useful #SmartContracts will need secure oracles as the data they require to execute is off-chain

#Oracles are the bridge between the on-chain world and the off-chain world

The gatekeeper so to speak

It doesn't matter how secure your Smart Contract is, if it executes based on faulty data

Garbage in -> garbage out

So knowing all this, how do we create a secure oracle system that can securely & reliably trigger contracts worth millions/billions/trillions?

Well this is the exact problem, @Chainlink and @Smart_Contract have been looking to solve since 2014

They didn't just ponder on it, they worked directly with the entities that want to leverage this technology, aka some of the largest institutions in the world

Turns out, the oracle problem is very multidimensional and requires coordination of many different parties

To accommodate this, Chainlink isn't an application specific oracle, it is an open & modular framework for building oracle networks that can meet the needs of any entity

What can be customized?
Well quite a lot

Including the info in the tweet below, you can connect Smart Contracts on any DLT to any external system that exists off-chain

Market prices, IoT, GPS, SMS, retail/bank payments...

Your imagination is the limit

https://twitter.com/ChainLinkGod/status/1195451235056308224

The crypto that will achieve the largest marketcap will be the protocol that achieves the largest network effects

Chainlink connects ALL blockchains/disturbed ledgers to ALL external systems/data

The volume created will more than what any single ledger generates

Why would the value flow to $LINK though?

Inelastic demand from users/contracts who need to pay $LINK to oracles for their data

Shrinking supply due to oracle nodes buying and locking up $LINK as collateral so they can serve more data requests

Why does Chainlink need its own token though?

$LINK is an ERC677 which is ERC20 with the added capability of transferAndCall which enables token transfers & contract execution in a single transaction

+Security (payment is send with data request)
+Gas savings (less transactions)

Having its own token isolates the security of Chainlink from external factors unrelated to the network

Stablecoin? Chainlink would then have to rely on the viability of that project

Native chain token? This would become very problematic as Chainlink is blockchain agnostic

Using $LINK means nodes need to have "skin in the game" to participate in the network

This keeps the incentives alligned as nodes are unlikely to do anything that would harm the network and cause $LINK to fall in price, as it would hurt themsleves financially

Using $LINK also means Chainlink can effectively solve the chicken or egg problem of bootstrapping a new network

Oracle nodes are subsidized (like a block reward) so participation in the early days of the network when there is little volume is now economically sensible

There is so much more I could go into (eg Mixicles, TEEs, Threshold Signatures, IC3, DeFi, memes, cryptoeconomics)

Let me know if I should continue my ramblings or not, for now I hope you have a better overview of the value #Chainlink $LINK generates

This is just the beginning