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Chainlink. History of one cryptocurrency

2019-12-25

Despite the greatness and leadership of coins such as Bitcoin and Ethereum, the world of cryptocurrencies does not end there. Developers create systems for different areas in the field of electronic money. The Chainlink cryptocurrency has become a prime example of promoting smart contracts. The article will consider the principle of operation, the history of origin and important features of the existence of the system.

About the Chainlink project

The popularity of the Chainlink cryptocurrency is directly related to the development of smart contracts that can maximally facilitate financial relations between users within the network. Developers based on the cryptocurrency were able to create a dispersed network of oracles, which was named Link. Due to it, contracts of bitcoin and other systems can connect to paid applications and conduct financial transactions.

Oracles are special software that allows access to the network and ensures the correct execution of its functions. They help to carry out transactions between two users without an intermediary, but only if all the terms of the contract have been met.

Link is a network that creates secure access to smart contracts. System managers provide services for creating smart contracts for coins in the Link system. Lets take a closer look at what it is.

Thanks to smart contracts, users have the ability to conduct any financial transactions without intermediaries and regulatory authorities. Experts say that the most difficult and widespread problem of such a service is the ability to connect it to services that operate on traditional payment methods. The oracle network facilitates connectivity with Bitcoin or Ethereum.

Chainlink history

Chainlink can be safely called a decentralized cryptocurrency, the source code of which is in the public domain, and the technology is software. There are 2 leaders in the team of creators. These are the director Sergey Nazarov and the head of the technical part of the project - Steve Ellis. The rest of the specialists act as consultants. These include Ari Juels, who works in blockchain technology, Hudson James and Andrew Miller, who have participated in many similar projects.

The story of the emergence of Chainlink erupted into a loud scandal among users. The collection of investments lasted only 10 minutes, due to the incorrect presentation of information for potential investors. A system crash occurred and the recipient address was opened later than planned. During this time, many users have already sent the required contribution in Ethereum coins. The forum erupted with angry comments to which no one responded.

Despite the further correct operation of the service, the Chainlink team will always remember this unpleasant incident, which nevertheless managed to spoil the reputation of the system a little.

How Chainlink works

Any system user who has a file with information about goods or a payment system can add them to the contract for exchange for coins. Chainlink partners with Bitcoin and Ethereum, and customers are rewarded for operating the oracles.

The principle of the system is to divide it into 2 parts. It is a blockchain within a blockchain and an external chain. They are necessary for interaction with each other in order to deliver services on the network. The main task of the system is to provide the correct operation of oracles, regardless of additional factors. According to the creators, smart contracts must match the information provided on them in order to avoid financial disasters.

Chainlink issues coins called Link, which are designed to collect information offline. This provides a safe mode of operation due to the formation in the blockchain format. To be able to use a smart contract through the Chainlink node, you need to pay for the Chainlink Node operator using Link coin. Link tokens are created to make payments for services outside the blockchain and are used to compensate for the needs of the network.

To determine if there will be a wide demand for such services, it is necessary to start testing the system. In the event that the number of users does not reach the norm, the coins will practically depreciate. Chainlinks management has issued 350,000,000 coins. Tokens are distributed in the following ratio:

Foldsal will be 35%;
system launch - 35%;
30% will be spent to cover development costs.
Chainlink node operators act as sellers of services or payments and are rewarded with Link tokens.

Chainlink capabilities and features

At the moment, the main feature of the system is considered to be cooperation with such large and eminent cryptocurrencies: Bitcoin, Ethereum, HyperLeger. The creation of a common oracle system with full blockchain interoperability speaks to the long-term prospects of the Chainlink system. The oracles will help get blockchain technologies mass distribution, which will be the basis of financial transactions in the future.

Chainlink smart contracts contain 3 main functions:

Oracles reputation assessment program. The user can choose the option with the best performance, be confident in the accuracy and security of transactions. Oracles giving incorrect information will be significantly reduced in rating.
Software that allows you to recruit the required number of oracles to draw up smart contracts.
Collection of information on contracts. This allows us to highlight general answers and recommendations for this area of activity.
It is the availability of smart contracts that makes the Chainlink system stand out from other cryptocurrencies. In recent years, Chainlink can claim to be one of the most successful.

At the beginning of 2019, the value of the coin was $ 0.40. Experts believe that the token was able to overcome the value of $ 2 per coin thanks to cooperation with Google Corporation. They want to use smart contracts based on the Chainlink system in their work. The very first news of a collaboration with Google has raised the cost of cryptocurrency by half.

At the moment, the opinions of experts differ. One side believes that Chainlink is quite capable of growing by 450% in the long term, while the other is confident that the system may fail, as it is now being greatly stretched by users.

How Chainlink is created and how to get it

Chainlink cryptocurrency is not available for mining. The system works exclusively to provide high-quality services in the field of smart contracts, therefore, the coin can be purchased through the use of smart contracts based on Chainlink technology in its field of activity. For this, the user will receive a reward in the form of Link crypto coins.

This format is a good additional income for people who have their own business. There is also an easier way for investors. Chainlink cryptocurrencies can be purchased on special exchanges without much difficulty. The largest volume of sales comes from Bitcoin, Ethereum and Tezer. These are the most affordable options for purchasing Link coins.

The global goal of smart contracts from Chainlink is considered to be implementation in almost all areas of activity due to convenient use and providing a high degree of protection. Developers are trying to create a dispersed network using blockchain technology that will work reliably and without major disruptions. This system will allow for a high-quality combination of smart contracts with the following objects:

various APIs;
important external resources;
bank payment systems;
sources of information.
The Chainlink system is thus of little interest to miners. Investors and businessmen can see it as an alternative to other cryptocurrencies thanks to its good characteristics and powerful partners.

Chainlink strengths and weaknesses

All cryptocurrencies, regardless of their value or popularity, have pros and cons of their use. The advantages of the Chainlink system include the following factors:

The system remains decentralized with all the functions and capabilities related to smart contracts.
Fast execution of any types of transactions, without errors, delays and large commissions.
Using Oracle in financial transactions that eliminate the need for intermediaries and ensure the security of transactions.
Reward with Link crypto coins for each transaction carried out.
All data is carefully checked for errors and omissions. The risks of getting incorrect information in the system are minimal.
All the above arguments speak of the prospect of the stability of the Chainlink cryptocurrency, but there are also a number of drawbacks that can affect the progress of the system. Among them:

Financial transactions do not have a working process. If the wrong address is entered, the funds will not be refunded, so users should be more careful.
The focus of the system on solving the problems of smart contracts does not allow full scaling of the project.
The unavailability of the Chainlink system to overloads that will lead to a crash in the program.
Such problems are not considered critical; with the proper approach, they can be solved without losing a large number of Chainlink users. Collaborating with Google and attracting large investors should be a good motivation for developers to eliminate all the shortcomings.

Chainlink in the TOP currencies and further perspective

On the day of this writing, the Link cryptocurrency rate is $ 2.24, and the cryptocurrency is ranked 16th in terms of capitalization, which is approximately $ 800 million. At the moment, about 350 million coins have been issued out of a billion possible. Due to the ability to pay bills in the system with Bitcoin or Ethereum, Chainlink remains a popular system in the cryptocurrency market.

Predicting the distant future of Chainlink is problematic. Many experts associate it with bitcoin, on which the Link rate will depend in the future. The prospect of the system is to continue its activities to create safe and convenient smart contracts, which can soon occupy their niche in the global economy and become its irreplaceable part.

Whether it is worth investing in Chainlink, each user decides based on their plans and goals. It should be understood that the system is highly dependent on bitcoin, and this can both bring good efficiency from investment and lead to the loss of part of the capital.

Conclusion

Chainlink is hard to compare with a number of ordinary cryptocurrencies, the main purpose of which is investment and mining. The system was created with other tasks, which, if properly implemented, should simplify financial relations between users and make them more secure. However, this is a very highly specialized area that cannot guarantee 100% good results.

Chainlink cryptocurrency is more suitable for long-term investment and the likelihood of growth in the long term is quite high. If the developers manage to translate all the ideas into reality, then Chainlink will be widely used in the field of blockchain interaction with global non-cryptocurrency payment systems.