Chainlink (LINK) is a decentralized blockchain oracle network that allows real-world, non-blockchain entities to securely connect with blockchain platforms. It is a middleware that connects smart contracts with externally available data.
To put it in simple words, Chainlink acts as the intermediary between sources of information from the outside world and the ones within the blockchain ecosystems.
This article is a guide to everything you need to know about Chainlink, including what it is, how it works, what purpose the network’s native LINK serves, its future price prospects, and lastly determine whether it is a legitimate cryptocurrency project.
So, without further ado, let’s get started.
What is Chainlink?
Chainlink is a cryptocurrency and technology platform that acts as a middleware to establish communications between blockchain-based smart contracts and externally available, real-world data.
Moreover, it is a decentralized oracle network, a blockchain abstraction layer. It leverages a technology called hybrid smart contracts and a cross-chain interoperability protocol to facilitate secure on-chain and off-chain transactions.
The open-source, Ethereum-based blockchain employs a proof-of-stake consensus model to give smart contracts access to data that lie outside of the blockchain.
It also allows them to do the computation externally while relying on the security and reliability of Ethereum to secure its platform.
How Does Chainlink Work?
Chainlink works similarly to any other blockchain out there in that it relies on a network of decentralized entities, otherwise known as oracles, to gather data from all kinds of sources.
The network then aggregates the collected data to deliver a single validated data point to the smart contract to execute the transaction.
This way, it can ensure that the risk of a centralized point of failure disrupting the entire network is reduced to zero.
The protocol has two main participants: purchasers and providers, and five types of smart contracts involved in the transaction process. Let us take a look at the different types of contracts deployed on Chainlink.
- Requesting Contract
Requesting contract is when a smart contract on Chainlink demands data and sends out a message to gain that information.
- Service Level Agreement Contract
Chainlink registers a request and produces a specific smart contract called a Service Level Agreement (SLA) on the blockchain to obtain off-chain data.
- Reputation Contract
Chainlink’s reputation contract verifies an oracle provider’s legitimacy and performance history before evaluating and discarding unreliable nodes.
- Order-Matching Contract
The order-matching smart contracts generate requests to Chainlink nodes, collect their bids, and get the requests fulfilled by selecting the appropriate number and types of nodes.
- Aggregating Contract
Chainlink’s aggregating contract checks all of the data collected from the chosen oracles to get and verify the results
What is the LINK Token?
Chainlink’s decentralized oracle network is powered by an Ethereum-based token called LINK.
The token is mainly used to compensate node operators for retrieving data for smart contract deposits that are requested by developers.
LINK is an ERC-677 token that allows data payload to be included in token transfers. Holders can stake their LINKs into a smart contract to become a node and supply data to Chainlink oracles.
The token also serves as a deterrent against the nodes misbehaving or submitting fake data to the oracle.
Chainlink Price Prediction: 2024, 2025, 2030
At the time of writing, Chainlink (LINK) is trading at $19.28 – up 5.9% in the last 24 hours.
Based on our price prediction model, LINK is forecasted to trade within a price range of $19.07 and $56.58 this year. If the token can reach its upper price target, then it could gain by nearly 200%.
In 2025, LINK is predicted to trade between $19.07 on the lower end and $78.13 on the upper end of the price spectrum.
The token could increase its value by 300% if it manages to reach the upper price target next year.
The price prediction for Chainlink in 2030 is for the token to trade within a price range of $46.83 to $94.16.
Based on the price prediction chart, we can expect LINK to gain a value increase of 388% if it manages to reach the upper price target during that year.
Where To Buy Chainlink (LINK)?
Here is a list of some popular crypto exchanges through which you can trade LINK:
Is Chainlink A Good Crypto Investment?
Chainlink is a decentralized blockchain oracle network that helps smart contracts receive data from sources outside of the blockchain world.
The Ethereum-based cross-chain, interoperable network requests collected data from the nodes and aggregates them to send a single validated transaction to the smart contract, which is then executed.
The open-source protocol is powered by the LINK token, which is used to pay for transactions, reward nodes for collecting data on behalf of smart contracts, staking, and supplying data to the oracles.
All things considered, I can fairly say Chainlink is vital to the crypto economy and the blockchain sector as it connects the digital currency world with the real world. The project has high potential and will play a crucial role in democratizing the industry.
However, you should note that LINK is like any other cryptocurrency, in the case that it is vulnerable to market swings.
Therefore, it is important to research before investing in the token, and only invest money you can afford to lose.
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