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What is ChainLink?
ChainLink is a platform that tries to bridge the gap between smart contracts on the blockchain and real world applications that often tend to be outside the blockchain. The cryptocurrency uses "oracles" that find and verify data from the real world and put it on the chain for integration into smart contracts.
ChainLink was developed by a company called SmartContract that was founded in September 2014. The core team behind the cryptocurrency consists of two people, CEO Sergey Nazarov and CTO Steve Ellis. Sergey is a serial entrepreneur who took an interest in the crypto world in 2011, long before the crypto world became popular. Before founding SmartContract, he founded Secure Asset Exchange (an exchange network) and CryptoMail (a decentralized email service).
Steve Ellis, the CTO, was a co-founder of SmartContract and worked with Sergey on the Secure Asset Exchange. He also worked as a software engineer at Pivotal Labs. ChainLink's advisory team is also strong, including Ari Juels, Professor of Computer Science at Cornell Tech and Co-Director at IC3, Andrew Miller, who is also an advisor to ZCash and Tezos, and Brian Lio, CEO of Smith + Crown.
What are the advantages of ChainLink?
Because ChainLink is tasked with bridging the gap between smart on-chain contracts and off-chain deals and data, it has two main architectural components: on-chain infrastructure and off-chain infrastructure. The on-chain infrastructure consists of on-chain contracts that are deployed on Ethereum's blockchain. These are smart contracts that handle data requests from users who want to access data outside the chain.
Users who want data from outside the blockchain ecosystem submit a requesting contract to the ChainLink network, which in turn processes those requests into their own contracts that match the user's contract with existing oracles that are appropriate for the application. The contracts include:
- A reputation contract that checks the trail of an oracle provider to verify its authenticity.
- A contract for order adjustment that records the agreement of the user contract over the network and accepts offers from responsible oracle providers, and
- An aggregating contact that collects data from the selected oracles and balances it for an accurate result.
ChainLink's on-chain functions follow a three-step process using the contracts above:
- Oracle selection: The user contract contains a Service Level Agreement (SLA) that defines parameters and requirements for the user's data search, which can include the reputation of the oracle, the specifics of the data required, the number of resources required, etc. Users can use filters and manually search for available oracles. ChainLink also offers an automatic matching engine in which oracles bid based on the SLA when manual search is not possible.
- Data reporting: Selected off-chain oracles execute the service contract mentioned in the smart contract and transmit the data to the blockchain so that the on-chain nodes can process the data.
- Results Aggregation: An aggregation contract is used to collect the data submitted by the oracles and balance all the data to provide accurate data to the user. This step is necessary to ensure data integrity and prevent manipulation.
User contracts have the option of introducing a penalty fee for misconduct that the oracles would have to pay. The off-chain infrastructure consists of oracle nodes connected to the Ethereum network that collect the data requested by users from off-chain resources. The received data is processed by the ChainLink Core, the software that enables the interaction between the off-chain infrastructure and the blockchain.
In return for their contribution to network harvesting and data transmission, the off-chain oracle operators are compensated in the form of LINK, ChainLink's native ERC20 token. In addition, off-chain nodes allow developers to integrate external adapters; Plugins used by operators to adapt other programs to their basic operations and to perform subtasks to streamline data collection. ChainLink currently only has interfaces to smart contracts on the Ethereum blockchain, but is expected to work with multiple networks in the future.
To solve the problems associated with a centralized oracle system that can be tampered with, ChainLink implements "source and oracle distribution," that is, it uses multiple oracles to collect data for and from a single usage contract in turn, they are expected to use multiple resources for their data collection. This successfully ensures the integrity of the platform and the accuracy of the data collected.
For further protection, ChainLink uses a technology called Intel Software Guard Extensions (SGS), which creates an "enclave" in which certain protected memory areas cannot be changed. This helps keep oracles honest, even when operated by an owner with a conflict of interest in a contract.
How do I buy and store ChainLink Coins (LINK)?
LINK, ChainLink's native ERC20 token, is available in over 10 exchanges, which is quite surprising as it is barely a year old. The top exchanges include Binance, Huobi Gate.io, OKEx, Merkatox, etc. Most exchanges mainly accept Bitcoin and Ether, but some also accept Tether, WETH, and others.
LINK is unfortunately not available at all exchange offices that accept fiat currencies, but it is probably only a matter of time before an exchange office starts accepting fiat currencies for ChainLink tokens. These are just platforms where you can buy or sell LINK tokens, but help choosing the right exchange is often required. CoinSwitch, one of the best cryptocurrency exchanges out there, will help you with this by displaying the prices of the exchanges it is sold on in one place. It supports more than 140 coins and 45.000 pairs of cryptocurrencies. You can choose any pair with your LINK token, and CoinSwitch will help you choose the most suitable pair for you! Even more - with CoinSwitch, you don't have to rely on your wallet at the exchange you buy from. Instead, all transactions can be made to and from your very own private wallet.
Store the LINK correctly
Since FUEL is included in the Ethereum blockchain, it can be kept in any wallet that supports Ethereum and other ERC20 tokens, of which there are quite a number. Hardware wallets are the most secure, and both Ledger Nano S and Trezor work for ERC20 tokens.
Exodus and Nebel are desktop wallets in whose blockchain Ethereum and tokens are stored. It is compatible with Windows, Linux and Mac operating systems. Jaxx, another wallet from Ethereum, functions as a desktop wallet for Windows, Linux and Mac PCs, as a mobile wallet for Android and iOS phones and as a web wallet through Chrome and Firefox extensions, making it one the most versatile wallets there is.
MyEtherWallet is his most popular web wallet, and ETHAdress is one of the paper wallets with ERC20 tokens.
What is the future of ChainLink?
Market capitalization and global acceptance
- ChainLink's ICO was held in September 2017 and raised $ 350 million through the distribution of 32 million LINK tokens, which is 35% of the total delivery of 1 billion tokens.
- The distribution of the LINK tokens is as follows: 350 million tokens (35%) were sold in the crowdsale; 350 million tokens (35%) would go to hub operators to incentivize the ChainLink ecosystem, and the remaining 300 million (30%) tokens would go to the company for cryptocurrency development.
- ChainLink has a circulating supply of 2018 million LINK tokens as of July 350 with a market capitalization of approximately $ 67,43 million and a unit price of $ 0,192 at the time of this writing.
It's difficult to predict the trends of a newer cryptocurrency, and ChainLink is not even a year old as of July 2018. It has been fairly stable in the short period of its existence and was valued at $ 2017 when it was launched in September 0,189.
- Its minimum value was around $ 0,13, which it hit in the month it was launched, and it skyrocketed to around $ 1,4 in January 2018, which was its maximum value. As of July 2018, the LINK brands were priced at $ 0,192 per brand.
- ChainLink has certainly climbed the ladder for such a new cryptocurrency remarkably quickly, ranking 120th in terms of market capitalization among cryptocurrencies worldwide. This is mainly due to its large supply in circulation, as its unit price is relatively low.
- Any cryptocurrency that manages to rise to the top 10 worldwide within 150 months could hold its own well in the future. The fact that it focuses on the trending technology of smart contracts and also tries to get the technology out of the blockchain world clearly speaks for it, especially since it is the first and only of its kind that currently exists.
Support and partnerships
As for cryptocurrencies, ChainLink has an impressive list of partners.
- Its best known partner is the SWIFT (Society for Worldwide Interbank Financial Telecommunication), which connects over 11.000 financial institutions worldwide. It is the widely accepted network that financial institutions use to send messages to give instructions on activities related to payments, securities, and so on.
- Zepelin_os is another partner, which is an operating system for developing smart contracts.
- Other partners include Request Network, a cryptocurrency competitor aiming to become the standard for exchanging fiat currencies for crypto, and London-based private asset firm Signal Capital.
How does ChainLink differ from other cryptocurrencies?
- ChainLink is the first (and currently only) cryptocurrency that has attempted to bridge the gap between smart contracts confined to the blockchain ecosystem and the real world.
- Smart contracts have been all but inaccessible to companies that have no intentions of adopting blockchain technology (which most of them belong to), and ChainLink solves that problem.
- The "oracles" that ChainLink uses currently exist, but they are all centralized, defeating the purpose of decentralized smart contacts and blockchain technology. ChainLink makes the whole process decentralized and is the first cryptocurrency to have done this.
Our conclusion: should you invest in LINK?
ChainLink's high position in the global market cap rankings is a huge plus for the company, despite having a relatively low unit price. Bringing previously unavailable smart contract technology into real-world applications is a revolutionary idea, and as this technology grows in popularity, it is sure to prove extremely useful in the future. Why investors prefer this coin over others offering similar services is a question that will force the investor to study its competitors carefully.
The LINK tokens are used to power the ChainLink network and as currency on the platform, indicating that their value is likely to increase as the platform becomes more popular (or as it increases). The tokens can seem interesting for a long-term investment, and an opportunity mainly because of their low individual costs, which tend to have a psychologically positive effect in the mass market.