The rising prominence of the DeFi platform Chainlink, its advantages, and how to buy its native crypto token LINK. Read this step-by-step guide.
Blockchain has received immense popularity since the launch of the first cryptocurrency - Bitcoin. This advanced technology has several benefits, such as decentralization and security. However, blockchain comes with its set of limitations too. The technology's decentralized nature limits the amount of external data that the system can accept and thus closes off from the rest of the world.
This creates a need for a bridge between these systems and real-world data. Chainlink, a decentralized oracle network, serves this very purpose and solves the problem of providing data to the blockchain from various external sources.
What is Chainlink and how does it work?
Let's begin with the basics. Chainlink is a blockchain-based cryptocurrency network that is built on Ethereum. It is essentially a decentralized network of nodes that provides crucial information and data from off-blockchain sources to on-blockchain smart contracts via oracles.
If you're unfamiliar with smart contracts, they are pre-specified agreements on the blockchain that analyze information and automatically execute the contract when certain conditions are met. For smart contracts to execute itself beyond the given data on the blockchain, they require off-chain data in an on-chain format.
This is where Chainlink and oracle come into the picture. An oracle is a software that acts as an intermediary and translates data from the real world to smart contracts on the blockchain. Every oracle on the Chainlink network is incentivized to provide accurate and trustworthy data since a reputation score is assigned to each one of them. Since Chainlink is a decentralized network that uses oracles to provide data, the entire process becomes reliable and secure.
Advantages of Chainlink
1) Access to reliable data off the blockchain
The decentralized oracle network has helped Chainlink be as transparent and trustable as possible. The oracle function validates each and every piece of information before feeding it on the blockchain. Thus, it provides an authentic way to access information outside the blockchain.
2) Secure smart contracts
Initially, several investors were apprehensive of investing in the crypto market. With the initiation of smart contracts, the possibility of fraud is almost nil. Since smart contracts exist on the blockchain, they cannot be altered or tampered with. Moreover, they are even verifiable since everyone on the network can see them, which in turn develops a high level of trust among involved parties. Due to this feature, smart contracts have been used for several things like developing new crypto assets, creating new crypto-financial products and more.
3) Accurate security system for users
Chainlink has a four-way security system that guarantees access to accurate data. The four-way security system has the following.
4) Validation system
This system monitors and controls on-chain behaviour and helps users identify the best oracle to use.
5) Reputation services
This security feature ensures that the ratings of each person using the oracle are recorded and published in the open network. This ensures that everyone has access to this information and thus builds trust and improves oracle reputation.
This adds extra security to the above-mentioned security service features. It provides an authenticity certification to quality oracle providers and thus guides users towards selecting the right oracle.
7) Contract upgrade services
In case the system gets hacked, or the oracle turns out to be faulty, this service acts as a backup. A new supporting oracle is immediately granted to ensure the process keeps running smoothly.
8) Scalability for the users
One of the most prominent features of Chainlink is its scalability. As the network grows, it can handle multiple pieces of information and data. Having a valid and authentic source of data aids businesses to thrive.
What is LINK - The Native Token of ChainLink
There are several cryptocurrencies, such as Bitcoin, Ethereum etc., available in the market. One of such coins that gained popularity since the rise of De-Fi projects is Link. Link is Chainlink's native token and is one of the top-ranked cryptocurrencies by market capitalization. Just like other cryptocurrencies, Link also works on the blockchain and incentivizes users to mine.
These link tokens are used to disburse several payments just like any other cryptocurrency. Mainly, the trade value derived from these tokens is used to pay node operators to retrieve smart contracts information.
How to Buy LINK?
The Link token was launched in 2017, and there are several ways to buy Link. You can exchange your existing cryptocurrencies for Link tokens, or you can even pay brokerage in the form of a fiat currency such as US dollars.
XanPool is our internationally compliant fiat-gateway software solution for exchanges, wallets and other related crypto businesses. With a smooth and secure onboarding process, you can buy link tokens from XanPool for a pleasant transaction from start to end.
Step 1: Signup on XanPool.
Click on the ‘Sign up’ tab available on the homepage of XanPool. The process is simple and easy. You need to mention your name, email address and create a password. After you submit, you have to verify your details by clicking on the link received through the mail. Alternatively, XanPool offers the option to sign up using your Facebook account.
Once you have verified your details, you need to complete the KYC process to securely buy and sell digital assets from the XanPool platform. To know more how to complete your KYC platform, please refer to this blog.
Step 2: Buy LINK on XanPool.
You can buy LINK from several different countries through XanPool. From the dashboard, after selecting LINK from the dropdown menu; select the country that you want to buy your BTC from. Currently, XanPool offers its services in Singapore, the Philippines, India, Indonesia, Japan, Hong Kong, Malaysia, Thailand, and Vietnam. Select the local payment method that you wish to use for buying BTC. Click on Xchange.
Step 3: Transfer LINK
Verify all your details and transfer your LINK coins to the OKEx cryptocurrency exchange platform. After you make the transaction, XanPool takes less than five minutes to process and transfer LINK into your account.
Is it Worth Investing in LINK?
When the link tokens just hit the market in 2017, they were traded for a fairly low price, i.e. just above a cent in USD. However, in 2020, this cryptocurrency witnessed tremendous growth in its value, and its prices began to rise precipitously. Consequently, by May 2021, the prices were soaring at a high of $52.20.
Over the past year, its value has risen by approximately 873%. This indicates that there is a significant demand for this crypto. Please note that investing in the crypto market always comes with its share of risks and concerns.