Chainlink is a decentralised oracle service that connects the world of traditional financial services with blockchains. Chainlink provides a secure platform that works with smart contracts across blockchains. This in turn enables those smart contracts to access real world resources include bank payments, APIs and data feeds.
What is Chainlink
Chainlink is designed to provide a bridge between blockchains and traditional payment services and third-party data feeds. Chainlink sits on the Ethereum blockchain, allowing for connections with the Ethereum decentralised applications (dApps). To achieve this Chainlink uses oracles which act to verify data from the real world. Once verified it can be added via a smart contract onto the blockchain. To achieve this, Chainlink has two primary components to its architecture, these are the on-chain and off chain infrastructure. The on-chain infrastructure includes on-chain Oracle contracts which are deployed on the Ethereum blockchain. When a user requires data from outside of the blockchain they submit a request to the Chainlink network. This in turn puts these requests into its own contracts which are designed to match appropriate oracles with the user’s contract.
Chainlink was founded by CEO Sergey Nazarov and CTO Steve Ellis in 2015. Before founding Chainlink Nazarov was the founder of the decentralised email service CryptoMail and the decentralised Secure Exchange Network. Chainlinks’ CTO Steve Ellis was the co-founder of SmartContract. He also previously worked with Nazarov on the Secure Asset Exchange. 2017 the ERC-20 digital token called LINK was distributed during a public token sale. During the token sale a total of 350 million tokens were distributed. This account for 35% of the entire supply of LINK tokens.
Where to buy Chainlink
The LINK token can be purchased from a number of different cryptocurrency exchanges. These cryptocurrency exchanges include:
- Coinbase Pro
How to Buy Chainlink
In order to purchase CHAINLINK tokens, you first need to purchase ETH. Once you purchase ETH, you can then exchange it for CHAINLINK. For this example, we will explain how to purchase ETH on Coinbase, one of the most popular cryptocurrency exchanges.
Use the link here or click the image above to get $10 in Bitcoin when you purchase or sell your first $100.Register on Coinbase
Step 1: Create a Coinbase account
Select the “sign up” tab and complete the form by entering the requested information, including:
- Your name (exactly as it appears on your photo identification)
- Email address
Step 2: Verify your account
- Issue your phone number
- Upload an image of your photo ID
- Verify your credit or debit card, or your bank account information
Step 3: Select the “Buy/Sell” option on the menu, once our account is verified
After verification, select the “Buy/Sell” option on the menu
- Choose “Ethereum”
- Input how much you would like to purchase
- Select the “Buy” button
Step 4: Confirm your purchase
- Select the “Confirm Buy” button
Step 5: Open an account on an exchange that accepts Chainlink
For the purposes of this example, we are going to use the Binance exchangeRegister on Binance
Step 6: Register your Binance account
- Enter your email address and a strong password
- Select “Register”
- You’ll receive an email to confirm your account
Step 7: Login to your Binance account
Step 8: Transfer ETH from Coinbase to Binance
- Under the “Wallet” tab, select “Deposits”
- Copy the ETH deposit address you are provided with
- Log back into Coinbase
- Select “Accounts”
- Click “Send”
- Enter your ETH deposit address
- Input the amount of ETH you want to transfer
- Select “Continue”
Step 9: Exchange ETH for Chainlink
- When your ETH has arrived in your Binance account, you can exchange it for CHAINLINK tokens
- Select ETH currency
- Search for CHAINLINK in the search box and select it
Select whether you want to “Limit” order (you can choose the amount of CHAINLINK you want to purchase) or “Market” buy, which will autofill your order at the best price
Step 10: Select the “Buy” button
- Once you have chosen the amount of CHAINLINK you would like to purchase, select the “Buy button”
- Your CHAINLINK order will be immediately filled; your ETH will be transferred into CHAINLINK
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Why buy Chainlink
Chainlink addresses some of the core problems with traditional smart contracts. To understand why this is the case it is useful to provide a little explanation of what smart contracts achieve. With a traditional contract the terms of that contract are enforced by law, a smart contract replaces this by using code. A smart contract will execute itself a particular set of circumstances are reached. These circumstances are predetermined by code. The benefit of this is that unlike with a traditional contract no third parties are required for the contract to execute. This creates both efficiencies and increased certainty.
The problem faced by smart contracts has been how to integrate real world events that occur off the blockchain into the contract. Chainlink solves this problem by using blockchain middleware known as an oracle. Oracles are agents which find and then verify real world data. For this service they are rewarded with LINK tokens. The real-world data that they provide triggers the execution of the smart contract when the conditions by that contract are reached.
The success of Chainlink will in large part be influenced by how successful the blockchain is with developing relationships with traditional players in the financial space in this regard it has already had one notable success by partnering with the Society for Worldwide Interbank Financial Telecommunications aka SWIFT. SWIFT is the network which is used to verify that funds are available when a retail payment occurs.
How to sell Chainlink
Chainlink can be sold from the cryptocurrency exchanges listed above. The LINK token can be directly traded for a number of major cryptocurrencies including BTC and ETH. In order to sell LINK tokens, you need to follow these steps:
- Open an account with one of the exchanges listed above
- Transfer LINK tokens to the exchange
- Trade the LINK token for BTC, ETH or one of the other major cryptocurrencies
- Transfer the BTC or ETH to a platform that enables the exchange into fiat currency such as USD or EUR
- Exchange the LINK token for fiat currency and then transfer the funds to a bank account
Chainlink could solve a major challenge; how to integrate the traditional world of finance and real world with decentralised blockchains. The potential payoff from successful helping to bridge the flow of information between the blockchain and traditional finance could be huge. If Chainlink is able to deliver on that promise and develop the relationships required to monetise it, then this cryptocurrency could have a very promising future.
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