What is meant by chain linking?
In the context of a blockchain, chain linking means that two blockchains are linked together. Each blockchain is a sequence of individual blocks, which act as a booking system and store all transactions within this blockchain in chronological order. In this instance, the blocks build chronologically on each other.
This means that after the completion of a block, a new block must be completed, which also includes the sum of the previous block. The aim of this procedure is to prevent double transactions and errors in payment transactions.
Why is chain linking operated?
Basically, this type of linking is performed in order to connect two block chains to each other. This connection is used to facilitate transactions between these blockchains.
The chain linking serves in particular for increasing user acceptance, since the capabilities of the tokens can be increased.
However, even when performing a soft or hard fork, it must be ensured that users can exchange their current tokens in the new currency. If this option is not present, the fork will be rejected and users will continue to use the established and outdated token.
Chain linking, on the other hand, offers the opportunity to exchange tokens. There is still no definition of the exchange conditions, but only the possibility of carrying out transactions.
Furthermore, chain linking is also used by the OECD, the Organization for Economic Co-operation and Development. However, this is the comparison of indexes over a given period of time. The goal is to adapt one index to another.
Alexander Weipprecht is the managing partner of Provimedia GmbH. As a trained IT specialist for application development, he has been advising leading companies on the following topics for more than 10 years: online marketing, SEO and software. Cryptocurrency is becoming increasingly important to businesses and investors. Through Coin Report and Krypto Magazin Germany, Alexander wants to give all people easy access to the subject matter.