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What is the Chainlink (LINK) Token?

BitForex Editor
Sep 07, 2020

Chainlink is a cryptocurrency project that was started by smart contracts, a company based in San Francisco in the year 2017. Since it’s inception, it has shown so much promise that a lot of renowned companies are willing to partner with them.

Like every successful business that thrives, the company solved a problem that has been lingering in the crypto world. The problem, which is known as the “Oracle problem,” is solved by this company, which has made it grow in prominence in just a little time. For those not familiar with the Oracle problem, the Oracle problem is simply a common problem that exists when bad code is fed into the smart contracts. The smart contracts simply act as messengers that perform whatever instruction is passed on to it from “oracles” (oracle is a system that passes information to the smart contracts in a blockchain system and is in no way related to the Tech company, Oracle) in the form of codes without verifying the correctness of the codes. When this happens, the result is always unpredictable and incorrect. This is the Oracle problem.

Chainlink solves this Oracle problem by acting as a middleman or a bridge between the oracles and smart contracts. It performs the role of verifying every code or instructions before passing them to the smart contracts, thereby preventing the Oracle problem.

Chainlink is a decentralized blockchain system that solves the Oracle problem in blockchain systems by acting as a verifier of the instructions passed on to the smart contracts. To prevent smart contracts from executing malicious codes. For Chainlink to perform this duty as a verifier, it has to extract and share information from the oracles without compromising the security and privacy that is peculiar with blockchain networks. Instead of solely trusting a source, smart contracts now have access to valuable resources such as traditional bank account payments, web APIs, and data feeds.

Chainlink has three main features that have endeared it to crypto users all over the world, and they include.

The offer of smart contracts services

The smart contract service is like a digital legal binding service where codes containing instructions are. The instructions are to be executed automatically when certain conditions are met.

Oracle service is the linking of the digital blockchain to reality. Chainlink will require physical data to find out of the conditions in the above digital legal agreement are met before it executes the instructions. Simply put, Chainlink acts as a bridge between the digital world and Oracle or reality.

Decentralization 

What this means is that Chainlink can get information from a number of sources as opposed to using only one source. This feature makes it more transparent and efficient.

Chainlink also has its own token, which the company named the $Link. The token has been on an upward movement since it’s inception. Since the start of January 2020, the $Link has posted more returns than bitcoin, which is a massive fit for any new cryptocurrency. This data shows that this cryptocurrency is now becoming more widely used. Experts have suggested that the secret of the impressive stats the $Link is posting is not unconnected to the increased use of Chainlink’s price oracles in decentralized finance, aka DeFi. $Link is ranked 6th in the list of the largest cryptocurrencies in terms of market capitalization, according to coinmarketcap.com, ahead of more established coins like bitcoin cash and lite coin.

The fact that the Chainlink system receives information from multiple sources and supplies that multiple information to smart contracts makes the system very trustworthy and reliable. This distinct feature of the Chainlink makes it impossible for it to be altered by a malicious attack, as has been experienced by similar systems that operate using only one source of information.

The number of node operators increases the market value of the $Link token, and the number of node operators has been rising steadily. This is the reason for the increasing market value of the token.

Only the Link token is accepted on the Chainlink network for payouts, and this has led to criticism in some quarters as they have suggested that other cryptocurrencies should be accepted for payouts. However, the Chainlink network team’s refusal has seen the value of the $Link chain increase. $Link can be exchanged on almost all the leading crypto exchange platforms available in the crypto industry.

The uniqueness of the Chainlink network has made marketing themselves a very easy task as companies and nations are very interested in their peculiar services. This has made a lot of companies to go into partnership as the prospect of not needing to create their own system as the decentralization of the Chainlink network has got them covered in that regard. The Chainlink oracle services can now be enjoyed on some other blockchain services like bitcoin and hyper ledger thanks to the partnership agreement signed with these two companies. The company has also signed some other big statement-making partnerships that have made everyone conversant with the crypto industry take note of the company and their prospects. Some of the companies in collaboration with Chainlink include Synthetix Network, Celer Network, Google, Chinese Government Blockchain Service Network (BSN), SWIFT, and BetProtocol, a betting company.

Conclusion

It is evident to everyone that Chainlink is one company with a lot of prospects and one that will be around for a very long time. The little time it has taken to shoot up to prominence is not surprising giving the innovative features they are packed with. The crypto world had a disturbing problem, and they stepped in to solve the problem.

For the Chainlink’s token, the $Link, it is obvious that there is still more height to be reached as in recorded a staggering $1000 increase in just 12 months, and it has shown no signs of slowing down. It is interesting to wait and see the height this token is going to attain in the coming months.

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