ChainLink, which is a decentralized oracle network, is one of the best emerging cryptocurrency projects, which is making its place in market with great force. With this growing demand, people are seeking to know more about the cryptocurrency and we have written about the project in detail to quench their thirst of knowledge. Our analysts made a price prediction regarding the currency so that investors can make their assumption.
Chainlink is a decentralized oracle service which created a network of nodes to provide information to and from the blockchain. Chainlink oracle is developed to translate the requested information from the outside into a form accessible to the blockchain. Oracle obtains data from the outer side and inserts it into blockchain connecting digital contracts with the outside world. There is a condition that a chain is required for managing data in smart contracts, which suppresses their active distribution.
How to understand the real value of Chainlink? To understand this, you have to go through some concepts involving Chainlink.
By nature, smart contracts are immutable and these exist on a blockchain. Smart contracts ensure trust among parties by evaluating received information whether it is authentic or not and then automatically execute providing that some conditions are met.
Actually entering off-chain data in an on-chain format into a blockchain is really difficult, where smart contracts are a solution. Smart contracts provide security at the time of transaction and reduce surplus transaction costs. When compared to traditional system, it saves time and faster, cheaper, and secure way of payment.
Chainlink is the solution to
Through oracles, ChainLink, a decentralized network of nodes, provide data and information from off-blockchain sources to on-blockchain smart contracts. With an extra secure hardware, this process expels the reliability issues.
After smart contract putting out a request for information, the Chainlink protocol registers this request as an event and then generates a analogous smart contract to get this off-chain data. There are also three sub-contracts namely a Chainlink Reputation Contract, a Chainlink Order-Matching Contract, and a Chainlink Aggregating Contract that are next to be created by the Chainlink Service Level Agreement (SLA) Contract.
Chainlink Reputation Contract
To evaluate and discards unreliable nodes, Chainlink Reputation Contract keeps eye on oracle provider’s track records to judge its authenticity.
Chainlink Order-Matching Contract
This contract delivers the Requesting Contract’s request to Chainlink nodes and takes their bids on the request and then selects the right number and type of nodes to fulfill the request.
Chainlink Aggregating Contract
This contract gathers data from oracles and matches the most accurate results with the smart contract that needs them.
Suppose, five nodes provide one answer from a weather sensor whereas two other nodes come up with a different answer, in that case the contract will take these two nodes as dishonest. And then chainlink aggregating contract will discard these nodes and this is the way how Chainlink nodes can validate data from a single source. The repetition of this validation process can be happened providing that there is multiple sources.
Significance of LINK tokens
To pay Chainlink node operations for the service they are serving, requesting contract holders use LINK token. This token is also used by Chainlink node operators to stake in the network. To fulfill requests, nodes with greater stake are usually selected. The Chainlink network punishes dishonest nodes by taxing their stake of Link for poor service.
Node operators use nothing but Link for payment because it isolates the security of the Chainlink network from the market volatility of some other asset.
To ensure, how much will be paid to node operator for executing a request on smart contract, a token is needed and the LINK token is required at the protocol level. Node operators can respond to the request knowing the amount they will be paid in terms of executing a request.
Chainlink in 2019
On Jan. in 2019, the price of Chainlink was near $0.30 which peaked in over $4.29 on June. And the year 2019 ended with a price around $1.80. The first period of 2020 started with a little dip but the price gained slowly. Link ended up 2019 with more than 500% ROI.
Chainlink Price Prediction (2020 & 2021)
Chainlink has been one of the bolstered projects in the crypto space, which quickly secured its high price leaving many others behind. Chainlink started its 2020 with $1.77 because of a short dip it had faced. But the price laughed overtime and it touched $19.85 on Aug 16, 2020, raising a great expectation among investors. As per today’s price analysis, Chainlink is standing at $9.38. According to the fundamental market view, increasing demand, the market’s bull-run inclination, and investor’s mob towards the cryptocurrency, the Analyst team of Cryptooof expect the price to hit at $16.00 by the end of the year. If it continues, the price will hit around $50.00 at the end of 2021.
Is Chainlink a good investment?
Every investment comes with risk. Many price prediction sites are recommending buying LINK as they expect its price to go up. As being new in the family of crypto, it is yet prone to price swings however the price of Link is presently at $9.38 USD.
Chainlink obtained this existing position very quickly rising high demand among investors. There was a spike on this oracle system last year, after the announcement made by the team to launch Chainlink on the Ethereum mainnet.
Will Chainlink hit $1000 USD?
The cryptocurrency industry is growing vying with traditional financial market. $1000 USD is a big target for Chainlink. But it is highly expectable that with the evolvement of the industry and technology, Chainlink will cross the target in future.