Blockchain has seen an astonishing rise in popularity soon after Bitcoin, the first cryptocurrency, was launched in 2010. As the demand for a decentralized currency has grown, it has catapulted Bitcoin and a wide range of other cryptocurrencies to worldwide fame and attention. The reason why Blockchain takes a toll is because of the advantages that users get. These include decentralization and robust security.
However, this dazzling world of Blockchain also has its disadvantages. Since this system is closed off entirely from the rest of the world for security purposes, it also limits the input data it can accept.
Thus, there is a pressing need to bridge the gap so that this system can understand what is happening outside the world. It is also true that input cannot come from a single source, for it will go against the very nature of Blockchain (relying on a single authority or centralized source of data).
As per the experts of the Crypto Audit companies, this is the brawl that Chainlink can solve, as we will find out in this blog.
What is Chainlink?
Chainlink is a decentralized oracle network that is immensely important in the real-world-wide plethora of external data sources.
Although it is brilliant in whatever it does–offering a decentralized, secure ledger for digital transactions–it is still not good at taking inputs for the things that are happening outside the Blockchain. Within the crypto world, numerous “off-chain” forces impact the markets. These include fiat currencies, sports scores, credit cards, weather reports, etc. Chainlink, the decentralized oracle, can provide input to smart contracts.
Smart contracts help Blockchain respond to different inputs. As Bitcoin is the first cryptocurrency, it can process a small range of this input. However, newer blockchains like Ethereum have a wider range.
In the year 2019, Chainlink crypto currency was launched on the Ethereum blockchain. It’s agnostic, which means it can also work with other blockchains.
What Is LINK, And What Is It Worth?
It is the native token of Chainlink. The main purpose of the token LINK is to aid in financing the growth of the project and is just like other tokens, BTC and ETH. Just like both of these tokens act as incentives for all the users who wish to mine, LINK does the same.
The growth trajectory of LINK is quite strange; launched in the year 2017, the initial price of LINK was under 20 cents, and quite surprisingly, till 2019, it remained under $1. Since 2020, the price has started rising precipitously. In early 2020, it was under $2, and soon it touched $36 on 20th February 2021.
Despite the meteoric rise of LINK, it has never reached the highest level ever again since it dropped. By March 1, 2021, the price had dropped nearly $10.
Is Chainlink A Good Investment?
You might have come to know about the volatile nature of LINK, despite its huge rise since the early 2020s. Thus, you must invest in it only as a way to support the underlying technology, else, the high volatility of LINK will be too much bear.
Nevertheless, as cryptos evolve, Chainlink will definitely be an important technology. This will be the secret to attain long-term stability and viability for cryptocurrencies. So, if you think that Chainlink will serve to be a benchmark for the industry–most widely used, decentralized oracle network, then only it will be a sound investment for you.
How Does Chainlink Work?
You might often wonder what is the purpose of decentralized oracle network? It enables smart contracts on Ethereum, Polkadot, and Cardano to act upon real-time data. We all know the nature of Blockchain–transactions are irreversible. Thus, we must ensure that it is acting upon accurate data. This is where an “oracle” comes into play.
It can be termed as any source of reliable information. For instance, if you’re looking for information about historical information, then the Weather Channel can act as its oracle. However, in Blockchain, there is no scope for any trusted third party, and this is where Chainlink comes in.
This is how Chainlink works:
There are many ways to buy LINK. However, it can only be traded on:
The volatility of this chainlink crypto currency is not a secret– thus, the decision to invest in it would depend on several factors. If investors don’t pay attention to the nitty-gritties, then it can be too much to bear for most of the investors.