What Is Chainlink?
Chainlink is a decentralised network of oracles, which are entities that provide blockchains with internal and external data. They find, query, and verify information from the real world before making it available on the blockchain so that it can be used in smart contracts (blockchain-based computer programs) for decentralised applications (dApps).
For example, Chainlink provides access to price feeds for decentralised finance (DeFi) applications such as Synthetix, weather data for weather risk solutions provider Arbol, and viewership data for blockchain-powered video streaming network Theta. It also automates smart contracts for projects such as Bancor and provides randomness on the blockchain for distributing rewards, minting non-fungible tokens (NFTs), and powering games.
Oracles are therefore vital to a wide array of blockchain-based applications and services—and Chainlink is one of the most popular providers. The Chainlink network is kept secure as oracle nodes must stake the project’s token, LINK. This token is also used to pay fees and reward contributors on the Chainlink network.
Take a look at the Chainlink Whitepaper for a full breakdown
Ways to Invest in Chainlink
Every investor is different, which is reflected in the way they invest. Some prefer to buy LINK for the short term and others for the long term. Both of these options have their pros and cons and we will explore these below.
Buy and hold Chainlink
This is the simplest strategy you will find and is pretty self-explanatory, purchase LINK and keep it. The advantage is that anyone can do it and potentially profit from it, regardless of experience, skills, and time commitment.
One small consideration you may wish to make is whether you buy Chainlink LINK with fiat currency or another cryptocurrency. Additional thought should also be made as to the current Chainlink Price as well as Trading fees.
Long-term investors hope that the value of the LINK they hold will appreciate over time. If they have the skills and resources to operate a node, they can even stake their LINK to earn fees.
Best Chainlink wallets
Private wallets are a popular place to store tokens for long-term investors as only the owner of a private wallet has the keys to access it. This can make private wallets a more secure storage option.
The most user-friendly private wallets are free software wallets that can be downloaded onto your desktop or mobile device. Those willing to pay for the best possible security may opt for hardware wallets instead, like Trezor, BitBox, and Ledger.
As the Chainlink price is volatile, like the rest of the crypto market, traders can also benefit by buying and selling tokens more often for more frequent returns. This will take much more time and effort than investing for the long-term and skills such as technical analysis will be useful.
Private wallets are less convenient for traders as they regularly need to access their tokens on exchanges. This is why many traders prefer to use free web wallets provided by the crypto exchanges.
Should I Buy Chainlink Now?
Only you can decide how to invest your money but we can provide information about Chainlink’s fundamentals and potential. The maximum supply of LINK is capped at 1 billion, making it a scarce asset and therefore potentially a good long-term store of value.
Demand for LINK comes from Chainlink nodes, who must stake LINK to participate, as well as those who use Chainlink’s services and therefore need LINK to pay fees on the network. This means that LINK is likely to become more valuable as the network grows and more applications and projects leverage Chainlink’s solutions.
Chainlink is already one of the most popular oracle providers and powers a large number of dApps and services across many industries. Given the breadth and usefulness of Chainlink solutions and the dedication of its community of “LINK Marines”, the project and its cryptocurrency may still have significant growth potential.