Bitcoin is not the only cryptocurrency that has been growing considerably in recent weeks. There is another crypto asset that is outperforming Bitcoin with approximately 400% increase, ChainLink (LINK).
The value of ChainLink with respect to the US dollar has gone through different stages. Since its launch in late 2017 until April 2019, its value had been fluctuating around $0.5, with some peaks of $1. However, in the last two months it has gone from having a value of $0.4 on May 1st to exceeding $4 in June.
Intermediary between Real World and Cryptocurrencies
To understand ChainLink we must know that a smart contract, in the blockchain technology, is basically a programmed digital contract. The conditions of this contract are established on the blockchain and the contract is automatically activated without the need for intermediaries. When operating in a decentralized blockchain network, the contract cannot be altered and all its content is public.
The fact that all the parties involved are also strict in their conditions causes a contract to be strict and unalterable. Another reason for this is the distrust created from the beginning due to the fixed agreement that has to be reached. Since a smart contract is unalterable, you cannot interact with external data sources, APIs (application program interfaces) or any other factor external to the blockchain. This is where ChainLink comes on stage.
ChainLink works through decentralized oracles on the blockchain, which are used to recover data from external sources (traditional payment platforms, banks and apps, among others). In this way, ChainLink can obtain external data to be incorporated directly onto the blockchain. It is a link between the blockchain and the existing infrastructure in which it operates.
The function of ChainLink is to verify the occurrences of the real world to incorporate them onto the blockchain and activate or modify smart contracts when the conditions established in them are reached. ChainLink oracles, like everything that happens in the blockchain world, operate in a decentralized manner and must extract information from several external sources and verify it to avoid fraud and modifications by third parties.
Reason for its Great Growth
The technology behind ChainLink and its use has significant potential to improve smart contracts. Currently, ChainLink operates with smart contracts issued in the Ethereum network, although it is expected to incorporate its technology into more cryptocurrencies. This seems not to be the main reason why it has grown so much in the last month but there is an extra factor to consider: Coinbase.
The cryptocurrency and currency exchange service Coinbase has included ChainLink in its service during the last days. Previous rumors have already increased the value of the cryptocurrency in recent weeks and its definite incorporation has triggered it.
It should be noted that Coinbase announced the inclusion on June 26th on its platform for professionals Coinbase Pro. ChainLink’s rise was slight that day and the next, but when it reached Coinbase on June 28th, its value skyrocketed. It went from being around US $2.4 to a maximum of US $4.5 in a matter of 24 hours. In these moments when everything is somewhat more stable, the currency moves around US $3.5.
By Willmen Blanco