Decided you want in on the action? You can buy LINK on Kraken.
Chainlink was created in September 2017 and later launched on the Ethereum Mainnet in May 2019. Chainlink provides a critical service that bridges on-chain and off-chain data called oracles. Oracles provide pricing data, as well as other forms of data, that are required for most major DeFi platforms and even crypto exchanges.
Chainlink and its native token LINK serve to bridge this gap and keep data that enters the blockchain accurate. The Chainlink network is blockchain-agnostic, meaning it can work simultaneously on multiple blockchains. With Chainlink's Cross Chain Interoperability Protocol (CCIP) going live in 2024, many investors are bullish on LINK as a digital asset.
Investors have clearly seen the potential in the project, but can LINK go even higher?
What is Chainlink (LINK)?
Blockchains are closed off from the outside world to ensure that they offer unrivaled integrity through decentralization. By eliminating centralized sources of data, blockchains can validate transactions without manipulation, giving the consumer a clear view of how the platform is operating at any time. Investors can see who is moving and who is holding. Analysts can conduct research with ease, and there is no need for an external source of truth. However, blockchains are closed off from the tangible world because even a cryptocurrency wallet is virtual in nature. If a centralized source were in charge of putting real-world data into the blockchain, it would defeat the purpose of the blockchain.
Chainlink solves this problem by creating a decentralized network of oracles. Defi applications can run with ease, every financial transaction happens that much faster and functions of the network can be generated and tested with relative ease. These oracles input data, and node-operators validate the data by reaching consensus in a similar way to how blockchain transactions are validated. Rewards are given for inputting correct data and verifying data. This process financially incentivizes oracles to input accurate data and deters bad actors who lose rewards if they input inaccurate data. That reward comes in the form of the LINK token.
LINK has a 1 billion maximum supply, of which nearly half of all tokens have already been distributed. In short, Chainlink connects blockchains to the real world without the vulnerabilities of centralization.
Chainlink (LINK) Market Cap
LINK trades around $20 per token in March 2024, with an all-time high coming in May 2021 at $51.24. It was one of the first coins to pump during the 2021 bull market, gaining a comitted community of "Link Marines." Chainlink is most heavily used on the Ethereum network, but is considered chain agnostic and used on various networks.
In fact, Chainlink first launched on Ethereum before being used by other blockchains. Market capitalization represents the price of the token multiplied by the number of tokens in circulation. The market capitalization of LINK sits around $9 billion, ranking in the top 20 largest cryptocurrencies by market cap. When looking at the potential for price growth, it is important to look at the market capitalization relative to other currencies to determine the true growth potential of a project.
Bull Case for Chainlink (LINK)
Smart contracts represent an incredibly powerful new type of agreement, in which no individual party can control the outcome. Smart contracts need to be fed data in a decentralized and accurate way to ensure they execute properly, and Chainlink’s decentralized oracle network seems to be the leading solution to the oracle problem.
If you believe that smart contracts are going to grow in importance, then so will the need for data solutions to feed them information. Chainlink is the leading data input solution and could see huge gains that parallel the rise in adoption of smart contracts.
Additionally, the Chainlink team continues to announce more and more partnerships with other major projects, showing that industry experts and institutions see real utility in the project. Several significant upgrades have also been made to the network, with more on the way.
These changes are outlined in the Chainlink 2.0 Whitepaper and notably includes hybrid contracts that use off-chain resources, reducing on-chain loads. In layman’s terms, Chainlink has been hard at work improving the scalability of its network.
Bear Case for Chainlink (LINK)
The token LINK has essentially 1 utility, with it only being used to incentivize the network validators. The network could grow to be very important, but the token could be relatively less important. Critics have said that the LINK token is not as relevant to the success of the project as it should be for a project of this size.
How Long Will it Take for Chainlink (LINK) to Reach $100?
Due to Chainlink’s large presence on Ethereum’s network, its price is closely correlated to that of Ether. When ETH broke the $4,000 level in May 2021, LINK broke $50, setting an all time high of $52. If you believe that ETH can break out to $10,000 as it transitions to a proof-of-stake model, then LINK can likely reach $100. Additionally, if other blockchain networks adopt smart contracts, such as Cardano (ADA), that also serves to benefit LINK.
Where to Buy Chainlink (LINK)
Chainlink is a top cryptocurrency and is listed on most major exchanges, such as Coinbase and Kraken. Coinbase has a great program going on right now called Coinbase Learn, letting you earn free cryptocurrency for watching short videos about blockchain technology. If you're investing in crypto for the long run, then Gemini is a great option too. Gemini lets users earn interest on their cryptocurrency, allowing you to earn steady passive income from your digital assets.
Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.
Where to Store Chainlink (LINK)
Best software wallet: ZenGo
ZenGo is a mobile application that offers a non-custodial wallet to store private keys. In addition to being a wallet, ZenGo allows users to buy cryptocurrencies in the application.
Best hardware wallet: Ledger
Hardware wallets store cryptocurrencies offline. The user’s private keys, which are used to authorize transactions, are stored on the Ledger device. This process keeps the keys offline and away from hackers who could access the keys from an online location.
Current Crypto Prices
The total cryptocurrency market capitalization sits just over $2 trillion, marking a strong recovery from the first few bearish months of 2022. ETH and altcoins continue to take market dominance away from Bitcoin. The ETH transition to proof-of-stake seems to imply a strong future for DeFi and a continued long-term timeline of growth.
So, Is Chainlink (LINK) a Good Investment?
If you believe that smart contracts are the future, then Chainlink should grow right alongside them. Chainlink is the leading decentralized data solution for the blockchain, and nothing looks poised to take that role from it. With more and more partnerships being announced, an active team and scalability upgrades coming, most experts and analysts see a bright future for Chainlink.
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About Noah Goldstein
Noah Goldstein is an Undergraduate Student at the University of Michigan. Noah is a writer that covers cryptocurrency news for Benzinga. Originally from New Jersey, Noah now resides in Michigan. Noah is an active cryptocurrency investor with positions in Ethereum, DeFi projects, and NFT Ticketing Solutions. Noah believes that blockchain technology will change the world.