In recent weeks and months, Chainlink (LINK) has been attracting a large number of investors due to its fast-growing price. The virtual currency was able to reach $19.80 per coin, a price increase of 915% since March after the Coronavirus sell-off in the markets.
Nowadays, Chainlink is the fifth-largest cryptocurrency in the market with a valuation of $6.92 billion. That means that the only cryptocurrencies larger than LINK include Tether (USDT), XRP, Ethereum (ETH) and Bitcoin (BTC).
In this guide, we will be sharing with you the main reasons why Chainlink is currently one of the hottest cryptocurrencies in the market and why you should pay attention to it. Furthermore, we will be explaining which are the main features of this digital asset and how it is helping the entire crypto market to expand.
What is Chainlink?
Chainlink is one of the most popular projects right now in the cryptocurrency market. LINK has been growing over the last few weeks due to the large number of partnerships that Chainlink has and due to the fact it has been helping a large number of projects in the crypto market to have accurate information to run smart contracts.
Chainlink is basically a decentralized oracle network that is providing valuable and accurate information to smart contracts on a wide range of networks in the blockchain market. The project was launched back in 2017 and it was able to raise $32 million during an Inital Coin Offering (ICO).
LINK is the digital asset that can be used to pay node operators that provide information to the blockchain networks using Chainlink. A failure to deliver accurate information would result in the reduction in the number of tokens rewarded to that node.
Thus, the network provides oracle services to the entire blockchain market and it is a key part for the ecosystem in order for it to work accurately.
Oracles are a very important part of the crypto ecosystem. As blockchain networks such as Ethereum (ETH) expanded all over the world, the smart contracts built on top of them required accurate information from the outside world to be executed.
Chainlink works as an intermediary between blockchain networks that run smart contracts and the information they need in order for these smart contracts to be executed. Thus, the accuracy of the data provided will be very important for these blockchain networks that run smart contracts.
During the last years, the complexity of smart contracts required even more complex and difficult information to access. This is why Chainlink is definitely playing a key role in providing blockchain networks with information from the outside world for these smart contracts to provide the expected results.
Wrong data and information can result in wrongly executed smart contracts with a wide range of consequences for both users and the blockchain network. Companies and blockchain networks that require off-chain data can request this information to the Chainlink network. The oracles will be ready to provide the necessary data and help these smart contracts properly run.
LINK in the Cryptocurrency Market
Over the last years, LINK has been a fast growing digital asset. It has been providing data to several blockchain networks and it was able to register large price gains. Since it was launched its ROI surpassed 9,000% and it continues to register massive gains on a regular basis.
This is why it became the largest oracle network in the market with a total supply of 1 billion LINK and a current market valuation of almost $6.83 billion. Nevertheless, there is no information about its max supply, which could create some issues to Chainlink in the future if the max supply ends up being higher than the current 1 billion.
At the time of writing, the circulating supply is 350 million. Thus, we could expect an increased selling pressure in the future if new LINK tokens are released to the market. The massive growth cycles started for LINK back in April 2019 when the first bull market allowed LINK to reach a price of $3.56.