An open-source blockchain initiative called Chainlink (LINK) seeks to link smart contracts with the outside world by providing safe access to external data feeds and other APIs.
Chainlink makes it possible for smart contracts to be applied in a far greater variety of ways, such as supply chain management, payment services, insurance services, and more, by enabling these linkages. To find out more about ChainLink’s definition and operation, continue reading.
Chainlink: What Is It?
An Ethereum-based middleware called Chainlink enables Ethereum-based smart contracts to access important off-chain resources such as data feeds, different online APIs, and conventional bank account payments.
Thanks to this technology, anyone may create a smart contract that can access services that were previously only available through centralized apps (like PayPal or Google Sheets). These transactions are powered by the LINK token (LN).
Because of this, we think it will be a crucial component of any significant blockchain initiative. Let’s examine some examples of what you may accomplish with Chainlink today to better understand why:
- Any publicly accessible data source, such as stock prices, weather reports, and sports scores, can be queried by a smart contract. Chainlink would be your answer if your business logic needs real-time data from one of these sources to work correctly (for instance, if you are creating a decentralized exchange).
- Using PayPal or a credit card, you might pay someone straight from your smart contract. Simply use Chainlink to establish an API connection with one of these pre-existing payment providers and transfer funds to them upon the fulfillment of specific requirements (such as the delivery of products).
- You may use your smart contract to directly pay someone in cryptocurrencies. Put another way, you could design a mechanism that would allow two people to send money to each other without ever having to deal with a Bitcoin exchange.
Although all of these features are now achievable, smart contracts are unable to use them right out of the box, and developers must manually configure them. By establishing an open standard that allows dApp developers to request off-chain data, cryptocurrency payments, and other features while paying LINK tokens for each transaction conducted through their network, Chainlink seeks to address these issues.
Forecast for Chainlink Prices
From its September 2017 launch to November 2021, the Chainlink coin experienced a steady increase in value. In just over seven months, the market valuation of the Chainlink coin increased by an astounding 3,350%, from $12 million to $300 million.
With a total worth of almost $300 million, it is ranked 73rd in the world by market capitalization. It is now selling at $15.48 per token as of April 7, 2022, meaning that its market capitalization is $7.2 billion.
These numbers are outstanding considering that they represent such a fresh initiative, even though they are still minor in comparison to some other cryptocurrencies like Bitcoin or Ethereum. But if you think it has promise, this can be the ideal moment to invest before it’s too late!
How Does It Operate?
Smart contracts may safely access web APIs, off-chain data streams, and conventional bank account payments thanks to Chainlink. It is necessary to obtain information from external systems, such as Google Maps or bank servers, to develop an application to transfer money when a specific set of conditions is met.
These technologies aren’t automatically linked to blockchains because they weren’t designed for decentralized applications. This is where Chainlink comes in; it provides payment in local currency and uses secure APIs to link smart contracts with important external resources.
The Competition of Chainlink
There are a few blockchain-based rivals in the market for decentralized applications that need payment capabilities. Some of the most popular and widely used substitutes for Chainlink are as follows:
Lumens from Stars
Stellar is a decentralized open-source protocol that enables cross-border transactions between any two currencies and facilitates inexpensive digital currency to fiat money transfers. Additionally, Stellar accepts payments on its blockchain using lumens (XLM), its currency.
The Ripple
Ripple is a second choice that offers comparable services to Chainlink. Since Ripple was initially an inter-ledger protocol, it is also able to serve as a middleman between several ledgers and charge for these services.
The Omega One
Omega One is another business that shares Chainlink’s goals but operates differently. It is creating a decentralized marketplace, especially for digital assets. Omega One, in contrast to Chainlink, builds what is known as a trustless trust using distributed ledger technology (DLT) rather than smart contracts. This implies that you can trade cryptocurrencies without having to have access to your counterparty’s money or private keys or have to have faith in them.
Check out how Chainlink’s daily transactions stack up against those of other cryptocurrencies.
Blockchain Technology’s Future
Blockchain technology gained widespread attention in 2018 as a result of the sharp increase in cryptocurrency values. Nevertheless, blockchain has many more uses outside of the financial industry.
Blockchain technology in particular can significantly improve supply chains by increasing their efficiency. One such example that can be utilized to streamline and automate routine tasks is Chainlink.
