Now is the time to go all out on Chainlink?

Chain link (CRYPTO: LINK) has been an amazing token during the cryptocurrency mania. If you had invested just $ 1,000 in its initial coin offering in September 2017, your investment would be worth $ 178,183 today. But it would have been worth $ 473,545 in May before the big crypto sell-off began. The token even has its own dedicated community called the “Link Marines” and is not discouraged by the potential of the token despite the heavy losses suffered during the bear market.

It turns out that there is something to be excited about about this innovative token. Let’s see if crypto investors could benefit by signing up to join the Marine Corps Link.

Image source: Getty Images.

The idea behind Chainlink

When Vitalik Buterin first created Ethereum, it became a revolutionary way to transfer money seamlessly with smart contracts, that is, code that can automatically execute an agreement between the parties. . However, Ethereum cannot integrate real world data into such a deal. Chainlink fills this gap by creating an Oracle network incorporating market data, bank payments, retail payments, web APIs, backend systems, and other blockchain cryptocurrencies. The setup connecting real world APIs to smart contracts is known as the Oracle network.

Its network secures billions of dollars in value for smart contracts through the Decentralized Finance Network (DeFi). The token is popular for cryptocurrency derivatives, loan and loan contracts, stablecoins (i.e. coins requiring an underlying collateral backing the asset), and management of cryptocurrency assets. It is the first and most popular DeFi and Oracle token network of its kind.

What do the fundamentals look like?

Chainlink currently has a fully diluted market cap of $ 24.2 billion, with 441.5 million tokens mined out of a total of $ 1 billion. Plus, every transaction is lightning fast – taking 20 confirmations in five minutes.

However, since the token is primarily used to process large capital movements on DeFI networks, assessing its capacity for daily consumer transactions is not yet fully applicable. By the way, Binance is currently part of the Chainlink ecosystem – using the oracle token on its smart chain and saving developers the time they would otherwise have spent building theirs.

Unlike Bitcoin, Chainlink uses a Proof of Stake (PoS) protocol, which means there are no advanced cryptic puzzles miners must solve to process network transactions, greatly reducing the environmental footprint. by Chainlink. The downside is that people mine or validate block transactions based on how many tokens they have. In fact, 125 wallets control up to 80% of Chainlink, making the token extremely susceptible to price manipulation (mostly upward).

So what’s the verdict?

The best part about Chainlink is that it also has utility outside of the cryptocurrency realm. At present, Alphabet (NASDAQ: GOOGL) uses Chainlink to develop hybrid blockchain applications on Google Cloud. Overall, due to its limited supply, high utility, solid potential, and widespread adoption by the DeFi community, Chainlink is a token that investors can count on.

Going forward, I see programmable money forming the basis of consumer transactions. And since Ethereum currently lacks the capacity to process smart contracts in the real world, Chainlink would undoubtedly play a central role in “tying” those transactions to real world data for settlement, which would increase its price. If there is one cryptocurrency to buy in the bottom of the bear market, it would be Chainlink.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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