18.08.2022
Chainlink — what is it?
Chainlink was founded in 2017 as one of the stages of the blockchain that allows you to connect universal smart contracts. It is hosted on the Oracle Chainlink decentralized network, allowing you to securely interact with other channels, events, payment systems and payment options. Oracle Chainlink provides and stores important information both on and off the block to become a priority digital contract system.
The Link network is characterized by the fact that it allows each user, the node operator, to have a decentralized voice, participation and the possibility of their own contribution to the ecosystem. The network is controlled by a large group of programmers who have created open source code for access by researchers, scientists, data providers and security controllers.
This is one of the few platforms in the digital space that connects external information systems, for example, to Ethereum and similar blockchains. As a result of such associations, Chainlink connects the virtual world with reality.
The Link blockchain stage is developed on two levels:
- The first level is a network of independent oracles that store information from all API sources (off chain).
- The second level is occupied by the protocol, which is responsible for the technical side of the project and connects all the necessary data for smart contracts (on chain).
Founders of the Chainlink Labs platform
The chief director of the company is Sergey Nazarov. After graduating from the University of New York with a degree in business administration, Sergey decided to focus on management philosophy and at the same time become a teacher at the New York Stern School of Business. After that, he became a co-founder of various popular projects, some of which are ExistLocal and Cryptomail. Already in 2014, Nazarov, together with software engineer Steve Ellis, launched their own smart contract, which was connected to bank payments and external data. It was this project that led Sergey Nazarov to develop a completely new decentralized Chainlink platform.
The platform welcomes the good reputation of long-term employees, whose merits are rewarded with cryptocurrency. The platform also arranges periodic events to attract new customers and develop the project. For example, in 2017, the company carried out an ICO project worth almost 33 billion US dollars. Of this amount, 35% of the coins were sent to popular exchanges for sale, 30% remained within the company for further development, and the remaining percentage of tokens was equally distributed among employees to stimulate work in the company.
Chainlink network
The decentralized Chainlink network, which is used to pay salaries to node operators, has developed its own unique cryptocurrency. Link cryptocurrency is an ERC-20 standard token with additional functionality of ERC-223, ERC-667 (redirect and call). In tandem, these standards allow the coin system to process and group applications into a single transaction, which significantly speeds up the waiting time for the client. Link does not have its own blockchain, but can use any other to store cryptocoins, for example, the Ethereum blockchain. And already together with Ethereum you can use cryptocurrency wallets: Trust Wallet and MetaMask.
Also, operators and node developers are required to periodically stake coins, as this guarantees interest in the project in the long term and the overall stability of the entire system. In order for the platform to receive large contracts from the outside, it is necessary to stack as much as possible and more often. However, it is worth mentioning that stacking does not increase the circulating volume of the coin.The key aspect here is not to violate the privacy rules, because as a result of such actions, all the deposited LINK coins can simply burn out.
How does the LINK network and cryptocurrency work?
Smart contract is a systematized block on the blockchain that has the ability to process and execute information independently while observing all the rules. But almost all blockchains have some kind of limitation in their work, since they do not have reliable partnerships and connections to other data sources. Since millions of money pass through blockchains every day, which are then transferred to smart contracts. Relying only on information from the Internet is very stupid. In such cases, fraudsters can easily manipulate them so that the functions of smart contracts fail. As planned by the developers, the link cryptocurrency should solve such problems with the help of decentralized software elements — oracles. Thanks to them, the confirmed information that comes to the block will be translated into a parameter available for a smart contract.
Chainlink is very different from other oracles precisely because of its decentralization, due to which all information relies on one data provider, which eliminates the participation of third parties in transactions. It also strives to ensure maximum reliability, security and reliability of the user's personal information.
The smart contract needs real data that it receives from the Chainlink system.It, in turn, receives the request, registers it and sends it to the nodes. Further, information from all sources is checked inside the system and after that the system determines which source will be the key one. As a result of this scheme of work, the chainlink network significantly increases the protection of information, its accuracy and prevents smart contracts from malicious attacks by hackers.
Where to buy LINK cryptocurrency? Chainlink mining
The limit on the emission of Chainlink cryptocurrency is 1 billion tokens. During the ICO project, some of the coins were sold, while the other (about 300 million tokens) remained in storage. If you want to purchase this crypto coin, then you need to contact the services of exchanges and exchangers. You can buy Chainlink on the world's most popular crypto exchanges: Binance, Bithumb, Coinbase Pro, WhiteBIT, Huobi Global, Okex, BitMax and many others.
Analysts suggest that the volatility of Chainlink rate directly depends on the price of Bitcoin. However, there are a number of facts that prove the opposite, and for a long time Chainlink has been operating independently, and has also completely moved away from the influence of BTC on it. Since the cryptocurrency market is absolutely unpredictable, the price of a link can change quite often, whether it is a decrease or an increase.
If we talk about coin mining, then it can be argued that it is available to any user on standard GPU and CPU settings. As for the mining of the coin alone for the average user, the project developers themselves do not make long-term forecasts for such mining, since the costs will exceed the income. They advise to engage in mining by entire companies and organize pools and mining farms, then the income will be 100% and will cover absolutely all costs.
Decentralized Finance (DeFi) and Chainlink
The DeFi space is developing and improving every day, thereby causing the need to use high-quality and proven oracles. The use of smart contracts on such projects is possible only in cooperation with external data platforms.
As numerous analyzes show, the use of decentralized oracles on DeFi platforms can be subject to risks such as data leakage and a variety of fraudulent schemes in order to steal more client funds.In the space of decentralized finance, such cases have been repeatedly and to this day are not uncommon. There is an opinion that such services should not save their data on one oracle in order to protect the information from hackers as much as possible. Because if the information is on one block, access to all sources may be lost. However, many companies seek to solve this problem by establishing an internal algorithm for protecting data from malicious attacks and expanding the capabilities of their oracles. Despite the fact that the Chainlink platform itself suffered from one of these spam attacks in 2020 and lost about 750 Ethereum, the developers still believe that if the existing algorithms are improved, this can be avoided in the future.
Chainlink forecast and outlook for the project
The technology of this coin is very popular in the cryptocurrency space, although it carries risks, like many other coins. Experienced traders and investors have already invested part of their funds in Link. Most likely, they are attracted by partnership agreements with such well-known systems as Zilliqa, Synthetix, Celer and Hedera Hashgraph, which significantly strengthened the ecosystem itself and also added a number of new customers to it. As it grew, the link rate gained huge capitalization and the cryptocoin became one of the most popular on the world's cryptocurrency exchanges. Many analysts claim that the trend will accompany the coin in 2023 and 2024. The current rate of the cryptocurrency allows a novice crypto lover to replenish the digital portfolio, as well as experienced traders to dilute the list of existing crypto coins.
The value of the coin also increased as a result of the fact that the company developed new options for its use. Traders can now buy and sell Link futures using credits to multiply their profits.
While many still have questions about the reliability of Chainlink algorithms, the team continues to popularize their model, improve it and apply it not only in the digital but also in the real world. The latter aspect contributes to increasing the value of the coin, as well as obtaining new cooperation.
Since the coin is growing in price, and the team is working on the effectiveness of the platform, it can be argued that the Link cryptocurrency will be relevant and a competitor for many more seasons.
