Uploading the world’s data to the blockchain is a difficult task, but it did not scare off Sergey Nazarov and Steve Ellis from founding SmartContract, the company that would birth the Chainlink network. The Chainlink network integrates off-chain data to the blockchain, allowing for complex smart contracts to operate through a decentralized oracle network.
Up until the invention of blockchain technology, dealmakers relied on trust to operate in many different manners of life. A smart contracts gain the ability to guarantee – through code – a predetermined set of agreements, a need for trust between parties could potentially become obsolete. As Chainlink works to bridge real world data to the blockchain, systems can become trustless and transparent.
Smart contracts need access to external data sources, and Chainlink has profited greatly by providing a reliable solution. Traditional institutions have begun to wake up to the many benefits of blockchain technology, and Chainlink aims to provide that bridge between old and new technology.
Overview of Chainlink
Chainlink’s token, LINK, is an ERC-20 token, which is the commonly used token standard on Ethereum. Chainlink uses proof-of-stake consensus to secure its protocol. The original initial coin offering (ICO) announced a release of 1 billion LINK tokens, with just under half of them in circulation today.
The LINK token allocation is as follows:
- 35% of LINK token supply allocated to node operators
- 35% of LINK token supply allocated to public sales
- 30% of LINK token supply allocated to incentivize continued Chainlink development
Chainlink’s market cap is hovering at just over $3 billion, with each token trading for close to $6. While this market cap is impressive, it is far from its previous all-time highs when each token traded for $52 in May of 2021.
Why do People use Chainlink?
Different organizations use Chainlink to keep data safe, transparent and permanent. Databases are used all the time, but they are often in-house and subject to alterations. If two businesses have come to an agreement, but both have private databases, the situation can result in friction and foul play.
With all data on a decentralized, transparent ledger and a smart contract that automatically operates when conditions are met, the need for trust disappears. In turn, keeping both parties in line requires less work.
Notable projects and companies using Chainlink today include:
- Aave: Open-source and non-custodial protocol to earn interest on deposits and borrow assets.
- Synthetix: Derivatives liquidity protocol providing the backbone for derivatives trading in DeFi.
- Crypto.com: Centralized crypto trading platform.
As Chainlink continues to bring real world data to blockchains, the implications are massive. Shady, closed-door deals in business, politics and healthcare would potentially be reduced.
Chainlink was launched by a for-profit company called SmartContract in June 2017. Co-founders Sergey Nazarov and Steve Ellis are not new to the crypto space, with impressive resumes of several crypto startups between the two of them.
Prior to Chainlink, Ellis and Nazarov founded:
- Secure Asset Exchange
None of these companies launched by Nazarov or Ellis would prove as successful as what they would form together – Chainlink sits today in the top 25 cryptocurrencies by market capitalization.
Operating today as SmartContract’s CEO is Sergey Nazarov; he has become a well-respected name in the crypto industry and is rumored by some to be Satoshi Nakomoto – the creator of Bitcoin. While these rumors have been criticized, for Nazarov to even have his name in the rumor-mill for being the Bitcoin creator speaks volumes for his character and technical understanding of blockchains.
Two years after SmartContract’s launch of Chainlink, a new organization was formed, known as Chainlink Labs. This new organization works directly on the Chainlink network and helps enterprises integrate the technology.
Where to buy Chainlink
- securely through Coinbase's websiteBest For:Coinbase Learn
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.
To buy LINK, you can access a trading platform like eToro, deposit funds and begin trading. To further use Chainlink beyond trading, a non-custodial wallet is recommended. A popular option is the Coinbase wallet, which is separate from its trading platform.
How to Store Chainlink Safely
The recent failure of Celsius, a centralized finance (CeFi) platform where millions of users lost the ability to withdraw their funds, has brought more attention to non-custodial wallets. The phrase “not your keys, not your coins” has grown more relevant. When using a centralized platform to trade your crypto, you are placing trust in the platform, as you are not directly holding your crypto, but they are.
If you plan to purchase LINK through a software wallet, it is important to have a plan for safe storage. This goes for all digital assets, not just for LINK. While software wallets can help you directly hold your crypto, they can also be compromised through phishing hacks.
This risk of online attacks has led many users to rely on hardware wallets. A popular option for cold storage of your crypto is the Ledger Nano S, an industry-leading hardware wallet. After purchasing the cryptocurrency of your choice through the software wallet, it can then be transferred to a Ledger Nano S for more secure storage.
Chainlink’s Path to Success
The potential for the Chainlink network is clear, but much of it is untapped. A number of technical improvements have occurred as well as a need for further integration of non-crypto companies to use the blockchain. As the technology, use-cases and relationships progress, Chainlink could be a key name both as a crypto-based company and a data provider. The Chainlink community will look to continue to build value in the crypto bear market to be ready for further growth in the next bull.
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