Chainlink (LINK Coin): The Blockchain Oracle Solution That Monetizes Data

What is LINK Coin? Recently, you may have noticed the rising prominence of LINK Coin, the cryptocurrency of the ChainLink project. So, what is ChainLink? What aspects of its operational mechanism make this project stand out compared to other cryptocurrency projects? Is LINK Coin a safe investment, and how is ChainLink’s future potential evaluated? Everything about ChainLink and LINK Coin will be revealed in today’s article.

1. WHAT IS CHAINLINK?

ChainLink is the name of a decentralized blockchain Oracle project designed to integrate real-world data into smart contracts. In other words, it connects blockchains with the external real world. It enables blockchains to interact securely with payment systems and external data feeds.

1.1. WHAT IS LINK COIN?

The token of the ChainLink network, or the cryptocurrency of ChainLink, is called LINK. In other words, if someone asks you what LINK or ChainLink Coin is, the answer is LINK. The ChainLink coin (LINK coin) is built on Ethereum according to the ERC-20 standard for cryptocurrency tokens. LINK has a total supply of 1 billion LINK tokens. The supply of LINK tokens is distributed as follows:

– 35% allocated to investors during the token sales rounds.

– 35% reserved for Node Operators (contributors to the network) and ecosystem rewards, which will be distributed to encourage users to participate in the network.

– 30% held by the parent company of LINK tokens, SmartContract.com.

The Pre-Sale round sold LINK coins at $0.09 per LINK token with a 20% bonus depending on the time of investor participation. The subsequent public sale saw the price of LINK increase to $0.11 per token. In reality, LINK coin reached an all-time high of over $52 per LINK token in May 2021.

LINK coins are a critical component of the ChainLink project and the only token used to interact with and utilize the services of the ChainLink ecosystem. Smart contracts wanting to retrieve data from the ChainLink network must use LINK coins to pay the Node Operators. To become Node Operators, data providers must stake LINK coins.

1.2. History of ChainLink (LINK Coin) and the ChainLink Project

The ChainLink project is a product of the blockchain startup SmartContract, founded in 2014. The ChainLink Protocol was launched in September 2017 with a capitalization of $32 million and officially went live on its mainnet in May 2019.

Initially, the project offered services for smart contracts on Ethereum, and LINK coins gradually expanded to support smart contracts on other blockchains. To manage ChainLink’s technology, a fintech company called SmartContract Chainlink Ltd. was established.

1.3. Which Ecosystem Does LINK Coin Belong To?

LINK Coin is a token and cryptocurrency within the ChainLink Ecosystem. The ChainLink Ecosystem is exceptionally large. As of early 2022, the ecosystem included nearly 1,500 partners, collaborators, integrations, and ChainLink-supported entities across various fields and industries.

Notable projects include:

– Axie Infinity: The Play-to-Earn game project that created a global sensation for a significant period, not only in Vietnam but worldwide. Axie Infinity announced its integration of ChainLink’s decentralized price feeds in late November 2020.

 

– Agoric: A decentralized platform for creating smart contracts using the JavaScript programming language. Agoric is integrated with ChainLink to develop new products more quickly without the need to create custom data feeds. This integration enables developers to build DeFi applications more efficiently.

Some top DeFi protocols like Synthetix, Kyber Network, Aave, yearn.finance, and crypto.com have also integrated with the ChainLink ecosystem to provide the most accurate real-world data.

2. WHAT MAKES CHAINLINK UNIQUE

One issue arising from the mechanism of smart contracts is that input data can be inaccurate or manipulated, leading to undesirable outcomes. Smart contracts are seeking solutions to eliminate third-party counterparty risks by transitioning to decentralized data providers. ChainLink was created to address this problem by building a decentralized oracle network that provides both on-chain and off-chain data for smart contracts.

2.1. The Nature of ChainLink’s Operational Mechanism

The essence of smart contracts and blockchains is that they cannot gather information from outside the network and must rely on external information providers. ChainLink has developed a network that collects real-world information and translates it into a language that blockchains and smart contracts can process.

ChainLink’s blockchain mechanism operates through three types of smart contracts:

To facilitate the connection between users and data sources, ChainLink has divided its operational process into three distinct parts:

– Oracle Selection:
ChainLink users draft a Service-Level Agreement (SLA) that outlines the desired data requirements. The system then uses the SLA to match users with oracles in the ChainLink network that possess the appropriate data. Once parameters are set, users deposit LINK coins into a matching contract.

– Data Reporting:
Oracles connect to external sources to retrieve the requested data specified in the SLA. After being evaluated by ChainLink’s Reputation Contract to filter out unreliable or suspicious nodes, the data is sent back to the operating contracts on the ChainLink blockchain.

– Result Aggregation:
This step aggregates the collected data and sends it to the Aggregation Contract. The Aggregation Contract evaluates the validity of each response, assigns weighted scores to all data, and delivers the final result to the user.

Additionally, ChainLink integrates with oracles that do not operate on the ChainLink blockchain, independently gathering data as required by the contracts.

2.2. ChainLink’s Potential

An increasing number of projects, both within and outside the cryptocurrency industry, continue to collaborate and integrate with the ChainLink ecosystem daily. ChainLink (LINK coin) has consistently demonstrated remarkable growth in the cryptocurrency market.

In September 2017, ChainLink raised $32 million through its ICO for LINK tokens. By 2018, LINK’s price grew from $0.15 to $0.43. After being listed on Coinbase in 2019, LINK’s price surged to $2.24. By the end of 2020, LINK tokens traded at $11.14. Its all-time high of $52.88 was achieved in May 2021, driven by the overall recovery of the cryptocurrency market and developments within the ChainLink ecosystem.

While LINK tokens were significantly impacted during Bitcoin’s price decline, the average daily trading volume for LINK tokens is estimated to exceed half a billion dollars per day.
In terms of market capitalization (as tracked by CoinGecko and CoinMarketCap), LINK currently ranks 22nd, with a market cap exceeding $8 billion.

The ChainLink project has made a significant move by bringing Eric Schmidt, former Chairman and CEO of Google, on board as a technical advisor for its oracle network protocol. According to ChainLink’s roadmap, staking for LINK token holders was slated for implementation by 2022. This feature aims to enhance network security while allowing participants to earn rewards.

3. SHOULD YOU INVEST IN LINK COIN ?

During its ICO, LINK coin was priced at approximately $0.11 per token. As of today, LINK coin is valued at $18.42, reflecting an increase of 167 times its ICO price. Although LINK tokens were affected during Bitcoin’s sharp downturn, they are now regaining an upward trend. Furthermore, the launch of LINK coin staking is an anticipated event that could trigger a significant price surge this year.

One common question among investors is whether LINK coin is a safe investment. From a security standpoint, as an ERC-20 token based on Ethereum, ChainLink is secured using the Proof of Stake (PoS) consensus mechanism. PoS is a newer, highly secure consensus protocol considered an advancement over Proof of Work.

4. HOW TO ACQUIRE CHAINLINK

ChainLink (LINK Coin) is one of the most popular cryptocurrencies on the market today. Therefore, it can be found on almost all major cryptocurrency exchanges.

Here are some of the top exchanges where you can trust and purchase LINK tokens:

• Coinbase
• Huobi Global
• Gate.io

5. CONCLUSION 

In the first few weeks of 2022, LINK coin broke its downward trend with a price increase of over 20%. By now, you likely have answers to questions such as “What is LINK coin?” “What is ChainLink?” and “Should you invest in LINK coin?”

However, always keep in mind that every investment carries risks. The key lies in having a sound risk management strategy and a well-prepared trading plan to navigate market fluctuations.