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The ChainLink platform is developed on the basis of the Ethereum blockchain and serves to establish a connection between smart contracts and external data. The purpose of the project is to optimize and popularize the use of smart contracts, as well as to eliminate inaccuracies and errors in informing. Let’s find out what the Chainlink crypto was created for, and discuss its peculiarities.

How Chainlink Works?

The Chainlink ecosystem is based on the LINK token and the ChainLink network. By developing APIs and other platforms, developers intend to increase the possibility of using smart contracts in business.

The ChainLink network is a decentralized network of ChainLink nodes where data is distributed and sold.

ChainLink network consists of two parts: off-chain and blockchain. Both parts must interact with each other for the service to function normally. The blockchain filters oracles according to the metrics requested by the smart contract.

The off-chain part consists of oracle nodes connected to the Ethereum network, which independently collect data from external sources. Such a node, for example, may belong to the New York Securities Exchange, which will supply ChainLink with real-time trading status. ChainLink plans to integrate oversized oracles into a single system for more accurate data.

About Chainlink oracles

Chainlink developers believe that smart contracts can transform most existing industries, replacing traditional legal agreements with the fundamental blockchain consensus protocols through smart contracts, but today their ability to receive data from external sources is limited.

Traditionally, this problem is solved with the help of the so-called “oracles”. Chainlink proposes to create a secure and fully decentralized oracle system based on blockchain technology and allowing you to connect smart contracts to external (off-chain) sources of information.

Chainlink features.png — Chainlink features

Since oracles are third-party services managed by centralized entities that are not subject to the blockchain consensus mechanism rules, the question arises of the reliability of the data provided by such oracles. If, for example, incorrect information about the stock price is transferred to the blockchain, the smart contract may perform an incorrect function based on this information.

The developers intend to solve this problem by creating a decentralized network of oracles, with the help of which smart contracts can safely interact with external sources. Any owner of a data channel, API, etc. will be able to transmit information to the Chainlink network, receiving a reward for this in the system’s own tokens.

Pros and cons of Chainlink cryptocurrency

Pros:

The system has the functions of a blockchain system and smart contracts, but at the same time remains decentralized;
Information from external resources is tested for authenticity and reliability;
For transactions, oracles are used that ensure the safety and reliability of operations.

Cons:

Chainlink blockchain solves problems only in a narrow segment, which will subsequently hinder the expansion of the project;
In the event of a transaction made by mistake, it will be impossible to return the spent funds;
The rapid increase in money transactions increases the likelihood of a malfunction.

Chainlink Value

To get reimbursed for providing their services, node operators receive payment in LINK tokens. According to the developers, the cost of a LINK token directly depends on the number of node operators, that is, the more popular a company’s product becomes, the more expensive its token will cost. Some believe that the project does not need its own token and could use other cryptocurrencies to perform the same tasks. In response, the developers object that the LINK token will gain its value with the launch of a full-blown network.

Here are a few facts about Chainlink cryptocurrency:

Project name	ChainLink
Stock Symbol	LINK
Asset Type	Utility token
Network type	Blockchain
Consensus Protocol	Proof-of-Concept with SWIFT (being developed)
ROI since launch	1 303,73%
Launch date	September 21, 2017
Official Website	https://chain.link/

LINK token complies with ERC677 standard, but runs on the top of ERC20 and features the same functionality. The basic aim of using LINK is to serve as a means of payment to obtain data for smart contracts and derive the information from data outside the network. Thus, a node operator should be paid in LINK for a third-party smart contract to contact with ChainLink.

How LINK holders can earn?

LINK lines are used to pay data providers, node operators, payment providers, and other online service suppliers. Smart contract users will compensate the data providers that they use with LINK tokens.

The vast majority of smart contracts require external data to execute. It is currently very difficult to obtain this data, so the project exists. The token compensation system will guarantee accurate data in addition to increasing decentralization throughout the network.

Since LINK tokens are used as a currency on the project platform, the more use of the ChainLink platform, the more valuable LINK tokens should be.

How to Trade LINK?

The best way to trade Chainlink is to use online crypto exchanges. Today, the vast majority of exchanges support buying/selling LINK for both fiat and crypto (though the number of crypto pairs is limited and depends on the platform).

To trade the crypto, you will need to have a Chainlink wallet (the list of wallets can be found below).

Here are the largest crypto exchanges where you can sell or buy LINK:

Binance, Coinall, Coinbase Pro, Sistemkoin, MXC, Bilaxy, Hubi, VinDAX, Huobi Global, BitMart

Chainlink Wallets

LINK storage on cryptocurrency exchanges (for example, on Binance or Bithumb) makes sense only if the user works with a small amount of coins. You should always remember that the storage on exchanges does not have a sufficient level of reliability, so it is better to use wallets for this purpose.

LINK can be stored on wallets that support ERC-20 tokens, including MetaMask, MyCrypto or MyEtherWallet. Also, LINK can be stored on hardware wallets (Trezor, Nano S).

Chainlink is a blockchain with lots of potentials, and booming LINK price proves it one more time. Combining smart contracts and the system of oracles, Chainlink enables fast and safe data exchange without intermediaries and can be successfully implemented in various business projects. The demand for such technology is expected to rise which might promote further LINK growth.

If you consider investing in LINK or trading the cryptocurrency, this might be a good idea.

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