Even though the value of its token is up a whopping 6,600%-plus since its inception, it’s not too late to learn how to buy ChainLink in Canada. In this post, we will go over exactly what ChainLink is and exactly how a Canadian crypto investor like yourself can get invested in a project that just may revolutionize not only the way users settle smart contracts, but also the way blockchains communicate between one another.
It’s time to learn about one of hottest altcoin projects of 2020. Brace yourself. There’s a lot more to ChainLink than just the rising price of the LINK token.
ChainLink aims to link together the blockchain world with the real world in two distinct ways. Firstly, it aims to provide smart contracts with real-world information in a fast and accurate way so that the agreements contained within those smart contracts can be settled by a third-party that isn’t tied to a central authority. Think about it logically. All forms of news in the real world are owned by central authorities.
This means that information is subject to biases. It may come out at different times, and it may present details in a different fashion. There has to be some way for this information to be provided quickly and accurately to the blockchain because two parties engaging in a smart contract (which fundamentally exist in a trustless environment) need some way to settle the terms of that contract in a fair, accurate and immutable way. That’s one reason ChainLink is taking off. Smart contract developers are using the information. It makes sense that it would be useful to them. How else will smart contracts related to outside events like travel, whether, stock market prices or global pandemics be settled?
The other reason ChainLink’s token is taking off is because it serves to improve blockchain interoperability. It acts as a link between blockchains, aiming to be a sort of HTTP protocol or Internet of Blockchains. Other projects are promising to do the same thing, but just so you know, ChainLink is already connected to two major smart contract platform altcoins that are going to use the project to collect data and settle contracts. Those two projects both rank in the top 20 of all cryptocurrencies by market capitalization. They are Polkadot and Tezos.
Investors holding onto the LINK token today have to be ecstatic about their position assuming they got in during the initial coin offering in 2017. They’ve earned thousands of percentage points on their investment at this time and there is still room for the price to go up. We will discuss the token economics that make that possible in a moment, but the story surrounding how ChainLink came to be speaks to why it has fundamental value across the crypto market today.
While the whitepaper is only two years old, the reason for ChainLink’s existence can be traced back to Canadian blockchain entrepreneur and cofounder of Ethereum Nick Szabo. Szabo published a whitepaper describing a concept called a God protocol way back in 1997. The basic idea of a God protocol is that it’s a mathematically trustworthy third-party protocol that is on everybody’s side so to speak. It’s this idea of a God protocol that is the foundation behind a project like ChainLink. It exists to settle contractual relationships once and for all with data that is immutable and undeniable.
ChainLink is all about oracles. Oracles are nodes that bring information from outside the blockchain into a given blockchain ecosystem like we’ve already discussed in the sections above. Just as the idea behind the God protocol involves settling contractual relationships in an automated format that’s free of control, Oracle nodes act as trustless third-party sources that are automated and free of control.
Trying to bring this to the blockchain is not really a new idea. Programmers on smart contract platforms like Ethereum have previously tried to bring in outside information without the use of oracle nodes. The problem is that in a scenario like that, the developer bringing information into the smart contract is likely only bringing in information that satisfies one side of the contractual relationship. This means the information isn’t necessarily timely or accurate and it probably favours one side over the other.
Think about that for a second. You’re engaged in a smart contract where no third party is supposed to be involved, but you have a vested interest in bringing information into the deal that favours you and not the other party. That means neither one of you can trust each other to source accurate information and settle your contractual obligations towards one another.
That’s why finding a technically and fundamentally sound way to achieve ChainLink’s vision and deliver on its value proposition is so important. As is the case with many 2.0 blockchain project in this day and age, ChainLink delivers on its value proposition in much the same way that many other platforms do. By incentivizing participants to engage in an ethical and accurate manner, and also by heavily penalizing them if they don’t. The mechanics of how all of that works is tied together with ChainLink’s token economics to create a system where smart contract developers and parties tied to those contracts can gain accurate, timely and reliable information.
As with any cryptocurrency or decentralized technology, creating a trustless and immutable environment means having to compensate users in some way. Sure, we all want blockchain technology to revolutionize the future of ownership and currency, but there’s got to be a mechanism in place to help grease the wheels so to speak.
ChainLink’s token economics strives to do that in a way that not only helps smart contract developers and oracle nodes get what they want out of the ChainLink ecosystem. It also rewards investors for participating with a higher token value.
There are three factors that give ChainLink a sound economic structure. One is the fact that ChainLink tokens will go down in supply over time. The second driver is that smart contract developers have an increased need to gain access to accurate off-chain information. Third and finally is the fact that oracle nodes require enough collateral to be at stake as an incentive for providing the information.
The reduced supply of ChainLink tokens over time comes from the simple fact that more and more users will begin to use it, thus taking tokens out of circulation. But why do smart contract developers need to use the token?
In theory, an oracle node could provide information to a smart contract developer without taking any LINK tokens as a fee, but with the LINK token being so valuable the way it is now, there is no reason for an oracle node to be that generous. Smart contract developers need to provide LINK tokens as collateral because at the end of the day, they are competing to receive accurate and timely information related to settling their smart contract agreements with all of the developers who also need access to ChainLink’s resources so that they too can gain the information they need.
This creates an open, transparent and incredibly valuable marketplace for off-chain information where the players in the market holding the most value will get served first. That concept exists in any capitalistic market, so it makes sense that it exists within the ChainLink ecosystem as well.
In order for an oracle node to exist within the ChainLink ecosystem and earn LINK tokens for providing data to smart contract developers, they need to have some tokens at stake as a bond. This incentivizes oracles to provide the right information. If they fail to do so, they lose out on the value they provide as a bond. This concept exists in many other proof-of-stake and smart contract-friendly platforms like Tezos, and it will soon be coming to Ethereum once the 2.0 upgrade is complete.
Creating a demand for tokens can be artificial in many altcoin projects that don’t have a solid use case. ChainLink on the other hand is proving time and time again that it’s use cases are definitely valued by participants in the blockchain space. The project’s 2019 year-end report details an exponentially growing number of jobs being completed by an exponentially growing number of nodes. This means more and more technically inclined blockchain enthusiasts are willing to put time and sweat equity into ChainLink and contribute as oracle nodes, and more and more smart contract developers are relying on information provided by those nodes to settle agreements.
Given the explosive growth of ChainLink in 2020, excitement surrounding the year-end report for this year is going to be way more hyped up than the 2019 version to say the least.
At the present moment only 35% of ChainLink’s 1 billion tokens are in circulation and each token is worth approximately $13.85 Canadian at the time of this writing. That gives the project an astounding market capitalization of over $4.8 billion and puts it in the top 10 by market capitalization across all cryptocurrencies in existence today. From an investing standpoint, it’s easy to see that the cryptocurrency community is getting behind ChainLink.
As far as fundamental development and increasing utility is concerned, ChainLink not only has agreements in place with big altcoin projects like Tezos and PolkaDot as discussed. It also plays a major role in the third version of the Bancor network, the Celsius Network, and many other projects in the world of decentralized finance that also depend on accurate pricing information in order to pay out appropriate lending and borrowing rates to users.
Given that the worlds of smart contracts and decentralized finance are only going to continue to grow exponentially, investors wise to the benefits of ChainLink just might want to hitch their wagon onto some LINK tokens so that they can profit both directly and indirectly from all of the above as these projects and sectors continue to grow exponentially. That’s why now is the time to learn how to buy ChainLink tokens in Canada.
Given how much potential ChainLink and its LINK token possess, it’s no wonder that crypto investors all around the world are interested in investing. The good news is, Canadian crypto investors can get in on the fun too.
Buying ChainLink in this country is easy with Bitbuy. Bitbuy is one of the most cost-effective and reliable cryptocurrency exchanges in Canada. Registering for an account is free and completing Know Your Client verification can be done quickly and efficiently.
Once you’ve completed those two steps, you can complete an email transfer, a bill payment or a direct debit from your bank to your Bitbuy account and exchange your Canadian dollars for cryptocurrency.
In order to invest in ChainLink tokens specifically, you’ll have to exchange your Canadian dollars for Bitcoin first. On most exchanges including Bitbuy, ChainLink trades in cryptocurrency pairs with Bitcoin, Ethereum or both. This means you’ll need to own Bitcoin first and then log on to the Bitbuy trading platform in order to exchange your Bitcoin for LINK. Simply navigate your way to the BTC/LINK currency pair and create a market order for the desired amount you wish to purchase in the order book. Given that both Bitcoin and LINK trade in high volumes, most market orders will fill instantly if not very quickly.
If you want to get in to ChainLink at a set price, you can also execute a buy limit order, which only places your purchase once the value of the ChainLink token drops below a predetermined price you choose.
Once you have your tokens, you can keep them on the Bitbuy exchange if you plan to make quick trades for profit or withdraw your LINK tokens to an Ethereum-friendly wallet of your choice (LINK tokens are Ethereum compliant and use the ERC-667 token standard).
Now that you know all about the project and why ChainLink is becoming so valuable and you know how to buy the LINK token, you can officially put your own rubber stamp on the future of blockchain technology and cryptocurrencies. Welcome to the exciting world of ChainLink!