For a long time, Chainlink has been a hot cryptocurrency. The link/usd exchange rate soared to 208 percent in May 2021. From 11.27 at the end of December to around 37 on May 17th, 2021. This is noteworthy because LINK has come a long way from its bullish high of 52.20 sets on May 9th, 2021.
Chainlink’s path is straightforward but powerful. Through the construction of decentralized oracle networks, it provides the missing LINK between the blockchain world and the rest of the world.
Chainlink has managed to establish itself as one of the top digital assets to purchase despite its introduction in 2017, years after several of its competitors. But, when compared to Bitcoin’s price action and the crypto globe market performance, is it a viable investment? Many evidence points to LINK’s potential.
Chainlink was not among the top 100 cryptos by market capitalization in mid-2018 but is now in 13th place with a market valuation of nearly 11 billion dollars.
ChainLink’s Real Value
To understand the advantages of Chainlink and how it works, you must first grasp the fundamentals and technical ideas. Let me begin with smart contracts. You’ve probably heard of smart contracts in the crypto realm, but what exactly are they?
The funds will distribute to the startup after that. If not, the funds will then return to the donors. Because smart contracts run on a blockchain, they can’t modify and are verifiable by anybody who wants to see them.
This ensures a high level of trust among the participants. Assume smart contracts must reach agreements that go beyond those relating to the blockchain’s data. An off-chain set requires off-chain data.
But how can we make external information sources LINKable? External data to smart contracts on the blockchain in a language that everyone understands. One of the primary disadvantages of smart contracts is this.
In the meantime, Ethereum, Polkadot, Cardano, and the Binance smart chain have all developed smart contract capability recently. As a result, it has become a key element of their platform.
Concerns on ChainLink Address
Only their own networks may connect and receive information from smart contracts and blockchains. As a result, their application possibilities limit at best. Chainlink comes into play here.
A network of oracle-based nodes is provided by the platform that enables smart contracts to interact with off-chain data sources and extend their capabilities to market data bank payments. Any type of data source, including event data. Let’s say you wish to create a decentralized application as an example.
Dapp devotes to providing real-time sports results. Because it cannot get information from off-chain sources, this dapp will not work without the assistance of an oracle.
This dapp will receive all of the necessary information and data to end-users by connecting to a chain-link oracle. It’s important to remember, however, that simply adopting Oracle isn’t enough to secure the security and reliability of a consolidated data source.
ChainLink Network Security
Chainlink is an ERC-20 token builds on Ethereum with a proof of stake pos consensus mechanism. It’s not like Bitcoin’s proof-of-work (pow) consensus. It is reliant on the computer’s ability to use a lot of power.
For choosing node validators, Pos is based on the number of staked tokens. Pos protocols aims to address the passive power consumption required by pow models. Today, point-of-sale systems are getting more and more common.
Because they use less energy, they are more environmentally friendly. Aside from the fact that becoming green is the new trend, they’re also not difficult to scale.
Despite the fact that pow has demonstrated its strength in the consensus paradigm, Ethereum and other ERC-20 digital currencies have been fast-rising and breaking new ground in the crypto world.
