The Ethereum Smart Contract has been the livewire to creating a transparent and trustless system when it comes to sealing agreements between two or more parties. These agreements are third parties that contain codes that can interact with other contracts, make a valid decision and store relevant data. When this smart contract was first launched by Ethereum, different cryptocurrencies like Stellar, Waves, NEM, NEO, and Cardano have implemented the use of its smart contract into its blockchain network.
ChainLink cryptocurrency is also a leading coin from the bloodline of Ethereum smart contracts. ChainLink has incorporated the use of smart contract to retrieve data from the off-chain application and integrate it into its blockchain. This integration tends to bridge the gap between real life data and information in the blockchain system. This article is going to carefully guide you on ChainLink cryptocurrency from its meaning, history, features, how to secure its coin and its mining process.
History of ChainLink Cryptocurrency
The idea that surrounds the existence of ChainLink can be traced two years ago when San Francisco Fintech Company launched it as an open source. The creation of ChainLink by the developers was not only to create a mutual smart contract agreement between parties but to act as a link between off-chain and ChainLink on-chains through the use of APIs.
ChainLink was able to see the light of the day by a team of cryptocurrency experts represented by Sergey Nazarov and Steve Ellis. Though most people complained that ChainLink hadn’t gained more publicity, the developer’s idea was focussed on using its cryptocurrency network to revolutionize the Ethereum blockchain community.
ChainLink coin and its market cap
ChainLink is denoted as LINK for its token. When this article was published, its ChainLink price was $0.441432, and its market cap was $1,545,011,366. Its current circulating supply is 350,000,000 LINK as against its total supply of 1,000,000,000 LINK. ChainLink has been experiencing a high trading volume since 2018 making it rank 33 in the coin market.
What is ChainLink Cryptocurrency?
ChainLink is a decentralized network that operates with the use of smart contracts. It uses its oracle network to bring data from the real world to be used in its blockchain smart contracts. In absence of this oracle, ChainLink will find it difficult to verify data from off-chain and be used in its on-chain. So the incorporation of Oracle acts as a means of communication between data from outside to its on-chain blockchain.
ChainLink Architectural design
The main idea of ChainLink was to bridge the gap between on-chain and off-chain data creating a junction point where both environments can inter-relate. Its ChainLink architecture is designed in two architectural layouts:
The on-chain architecture consists of three main on-chain contract types; reputation contract, order-matching contract, and an aggregating contract. The reputation contract is responsible for checking the level of performance of the Oracle service provider in the network. The order-matching contract uses the reputation contract to select bids after collecting bids from the Oracle providers while the aggregate contracts collect the Oracle provider’s responses. In summary, these three on-chain contract types help a user who wants to access information off the block by submitting a request to ChainLink. ChainLink processes the information by using the three contract types to test for the reputation of the request. It then matches the request with its appropriate oracle and finally compiles result generated from the Oracle providers and submit it as the final result.
The off-chain uses Ethereum network connected from a network of Oracle nodes. These Oracle nodes collect data that are requested by users from off-chain and process such data through ChainLink core. This ChainLink core bridges the gap of interaction between off-chain and the ChainLink blockchain. With the use of its off-chain architecture, nodes operators may choose to add software extension in other to add other off-chain services.
The ChainLink token
The ChainLink token is the currency paid to nodes operators. These tokens are needed to compensate for off-chain data that are interpreted by its operating oracle.
How to secure its coins
Investing in ChainLink cryptocurrency network by participating as a Node Operator requires you to secure ChainLink Tokens. To secure this token, owning a ChainLink wallet is the first step to take.
1. Owning a ChainLink Wallet
The ChainLink tokens can be stored in any of the Ethereum wallets because it shares the same blockchain features with Ethereum. Some examples of its wallet are:
- MetaMask: This is an online wallet for hot storage of ChainLink tokens. It can be accessed with the use of a chrome browser extension or through any web browser. Wallet owners and those intending to own this wallet enjoy high security of private keys, easy set-up of its wallet and protection of tokens from malicious websites.
- MyEtherWallet: This wallet can be used to store ChainLink cryptocurrency. MyEtherwallet uses both online and offline storage system. Offline storage stores its coin by the use of external hardware and can be accessed anytime even without the use of an internet connection. MyEtherWallet online storage requires access to its coin only through the internet. Both types of myEtherwallet have their unique features and areas of usage.
- Ledger Wallet: This wallet is one of the most preferred offline wallet storage for Ethereum-based tokens. This hardware wallet has a high-security assurance because it can be accessed without connecting it to the internet.
2. Buying a ChainLink token
Buying ChainLink coins is very easy especially when it is bought from a trusted exchange service. If you are new to cryptocurrency, owning either Bitcoin or Ethereum will give you access to exchange it for ChainLink coin through any of the cryptocurrency exchanges. Examples of cryptocurrency exchange platforms include coinbase, cex.io, and coinmama.
Mining of ChainLink Cryptocurrency
The ChainLink idea of mining is quite different from the conventional way of mining and adding blocks through the use of hardware mining machines, software and hashing functions. It only pays node operators for retrieving data from off-chain feeds and converting it into ChainLink on-chain.