What is Chainlink (LINK)?
Chainlink wants to be the bridge between smart contracts and traditional systems. It serves as a middleware between traditional systems and smart contracts on the blockchain. Chainlink has already made partnerships with Google cloud and Oracle and thereby already has a foot in the door to being adopted by larger enterprises.
The oracle problem
One of the problems that Chainlink tries to solve is that traditional blockchains only carry data on-chain, meaning that it is not possible to transfer additional data. Traditional blockchains like Ethereum have a fixed set of data like transaction ID, timestamps etc. but they cannot listen or carry external data from the outside. This is where Chainlink tries to be different.
When a blockchain is communicating with several data sources (APIs) the blockchain will not be able to determine which data source that is correct. Traditional blockchains will only be able to send tokens back and forth but without carrying additional data. So therefore Chainlink serves as the middleware of translating the external data sources into something that the blockchain understands. For instance, you cannot send bitcoin on the Ethereum network. If a blockchain cannot communicate with supply chain management, markets, regulatory systems etc. then the enterprise use case is non-existing.
Chainlink solves the oracle problem by using a decentralised network of oracles that connect to the external data sources and feed the answers from the oracles into smart contracts on the blockchain.
With its unique way of solving the oracle problem and with already established partnerships Chainlink is currently leading the field of tokens that try to solve this.
The value of Chainlink should not be seen in the traded price on crypto exchanges but more like from the use case perspective. When larger enterprises incorporate Chainlink into their products, users of those will not even know Chainlink is a part of this particular service. Chainlink will play a key role in these products innovation and hopefully continue to drive the innovation forward.
4 exchanges where you can buy Chainlink
Bitpanda (review) is one of the best crypto exchanges for customers in Europe. Bitpanda has a lot of payment options and one of the most popular is credit cards. With credit card fees at 1.50%, Bitpanda is one of the lowest in the crypto industry and definitely worth checking out.
Changelly (review) is an excellent choice if you want to get started with cryptocurrencies quickly. Their service is super intuitive and they have made it as easy as possible to get on board.
Coinbase (review) has more than 30 million users and is serving clients in more than 102 countries. Therefore it is also considered as one of the biggest exchanges in the world.
We recommend Coinbase because they were among the first to make bitcoin and other cryptocurrencies easily accessible to non technical people. They offer a wide range of services and they always have the user in focus, which is why it is so easy to use.
Binance (review) is a fairly new exchange but don’t let that fool you. It was founded in July 2017 but by the beginning of 2018 it was the largest crypto exchange in the world.
Bitpanda is the leading crypto exchange in Europe with more than 1 million users. You can trade more than +30 cryptocurrencies, gold, silver and other metals.