What is Chainlink?

What Is Chainlink?

The new cryptocurrency, deriving from the parent trading platform, first appeared in June 2017 and the project’s implementation belongs to a San Francisco-based fintech company called SmartContract with Sergey Nazarov as its CEO. Chainlink’s developers have stated the goal of their project to create a trustworthy intermediary between blockchain and external sources such as bank account payments and application programming interfaces. Thus, it facilitates the process of interaction between consumers and suppliers of goods/services and all users can have the ability to connect to any existing payment system and perform all monetary transactions. Chainlink acts as software that has its own internal virtual currency in the form of a Link token. It also uses smart contracts as an alternative to conventional legal agreements and aspires to make a revolution in numerous industries including businesses around the world.

The Chainlink project is aimed at creating a dispersed decentralized oracle system that will be fully compatible with such blockchains as Bitcoin and Ethereum. Chainlink´s smart contracts have several functions, the first being the assessment of reputation. An investor can independently apply these contracts, having a specific range of characteristics, including the reputation of all oracles, as well as evaluating the service, which is called “Service Level Agreement.” An oracle breaking the rules of the system and supplying false information is punished by lowering its reputation. When the necessary number of off-net oracles has already been selected, you can begin to conclude agreements, deliver the requested information at the software level. The contract, which is in the process of aggregation, collects information that the off-line oracles transmit, and then averages them, creating weighted aggregate responses.

These smart contracts process information requests from a network user who wants to utilize the oracle service provided by Chainlink. In order to get access to non-network information, they can use a smart contract, which subsequently processes external data in a smart contract.

Pros and Cons of Chainlink

Advantages of Chainlink:

  • Chainlink has a simple yet significant goal. It aims to increase the accuracy and security of received information through the decentralization of smart contracts’ execution. It enables financial institutions and businesses to use smart contracts over the network without having to switch to smart contracts themselves and spending a lot of money on creating a new system or network.
  • LINK has achieved great importance in the crypto community. This is especially true within the business environment, where their services are highly requested by several of the world’s leading companies. Chainlink can proudly announce alliances with Google, SWIFT, Gartner, and IC3 on its website.
  • Back in 2014, the parent company, Smart Contract was engaged in the automation of negotiable instruments. Such previous experience should also benefit the new project, especially since many team members moved from there. From an investment point of view, the LINK token should have good growth potential, given the promising possibilities of the project.

Disadvantages of Chainlink:

  • The project popularizes the use of smart contracts, but its own success will entirely depend on the relevance of use. Chainlink cryptocurrency (LINK) is also evaluated in a similar way, its operation is limited by the internal use and success of the platform.
  • It is planned to issue up to a billion cryptocurrency tokens. According to expert estimates, such volume exceeds the potential activity of the user, which creates the conditions for maintaining the low cost of coins.
  • Another negative factor is Chainlink’s ICO. The planned crowd sale campaign failed when trading ended 10 minutes after it had started. Many investors considered themselves deceived, which negatively affected the reputation of developers and the project itself.

Where to Buy Chainlink?

Chainlink’s most important exchange is Binance. It represents the majority of the currency’s trading volume in Bitcoin and Ethereum, reaching approximately 97 percent. You can exchange these two currencies for LINK in such exchanges as Huobi Global, Kraken, Gate.io, Livecoin, OKEx, CoinEx, and Bithumb. Other available pairs include LINK/TUSD, LINK/USDC and LINK/USDT.

Storing LINK: Best Chainlink Wallets

Due to Chainlink being not a cryptocurrency itself, but rather an ERC-677 token, you may keep it in any wallet that supports such tokens. The available wallets include MyEtherWallet, Exodus, and MetaMask. You can also save your LINKS in trusted hardware wallets like Ledger’s Nano Х and Nano S.

Originally published at https://swapspace.co.

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What is Chainlink? was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

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