Hi everyone, Today, I'm going cover ChainLink
because it has unique features that catch my attention in the current environment. I'm starting
to explore new coins to share with you what I learn and understand in this industry.
My goal is not to make you purchase any of the coin that I will present, but
rather give you pieces of information so that you can make your own decisions.
In the logic of expanding my cryptocurrency knowledge, I'm trying to understand
competitors better by researching new things. Hello everyone, my name is Jerome I do videos
about cryptocurrency investing. My mission is to bring and share with you the right tools, so that
you can invest with more confidence. Short terms gains are one thing, but being able to keep in
the long is another skills. So if you want to join this journey, please considering subscribing to
the channel by clicking on the red button below, I truly believe we can go far together. I do have
a telegram channel for those that want to discuss more actively, so feel free to join ( the
link will be in the description down below).
This video will be broken down into three parts :
• Part 1 : What is ChainLink ? • Part 2 : Why should you care ?
• Part 3 : Risk levels to watch • And like always, watch until the end because
we will end off with the french quote of the day. #Part 1, What is ChainLink ? • ChainkLink : Decentralized oracle
network. In order to understand this, you need to understand what is an Oracle.
• An oracle is a data feed that connects blockchain to real life data.
• In Ancient Greece, an oracle was the term used to describe a female priest, who
game people wise but often mysterious advice from a god.
Today people this term more generaly to
describe someone who knows a lot about a subject and can give good advice. The idea remained
the same : give directions, to take actions. • In the context of a blockchain, if it requires
information about the real world like the Price of Apple, Tesla stock or more generic things, like
weather locations, sporting events results, it will be speaking to what we call on orcale.
• Why would it need information from the outside world ? Well, if you think about third
generation blockchains that allow smart contracts, they need these data to fuction properly.
• Smart contracts are often conditions based, and the trigger of their execution can
be based on real world information. • In the past you'd have specialized
insitution dedicated solely in providing thruthful information about a particular subject:
• When you rely on a centralize insitution to provide information, you are essentially trusting
their expertise. Blockchain taught us that we don't need the information to be centralized
because it can result in errors, hacks, or manipulation of data.
• ChainLink had it's ICO in 2017, and what it was trying to solve
is to make the information decentralized. Instead of having one person or entity holding
the truth, we will now have people coordinating on verifying outside informations.
• It works as a regular mining process : participants in the network are essentially
helping smart contracts to understand and verify what is happening in real life.
for their workd, they receive ChainLink Token.
• One of your question might be, how do you
actually verify that an information is true? For example how can you make sure that
people say that Biden was elected, when others are pretending the opposite.
• Informations provided by oracles need to have three characteristics :
○ Veracity, meaning that the information is verifiably truthful
○ Availability, meaning that it’s readily accessible.
○ And Completeness, meaning that it’s able to be computed.
• Chainlink has an incentive mechanism for people to tell the truth: The reputation
of verifiers are store into the blockchain, and when they attempt to push false information, it is slashing it's reputation.
• I like to use analogies and images to remember thing, so you can
try to picture Chainlink and Oracles as the eyes of smart contracts, this should
allow you to not forget what we are talking about Part #2 Why it's a coin to watch ? • People holding ChainLink tokens
are called the ChainLink Marines. • We had wild moves over the past 2 years.
Chainlink has been one of the best performing asset for two consecutive years.
What I like
about it, is that It's performance is somewhat decoupled with the rest of the crypto space.
• In traditional finance and investing, this is exactly the types of asset you want to
see. The ones that are doing their own things, no matter what the market is doing.
• ChainLink rose in 2019 when the market was still struggling to find momentum.
• Since its launch, it more or less has done things on its own. That is
why it is the first coin that I'm currently watching to build a position.
• The 3 months correlation of ChainLink to Bitcoin is currently standing at
around 0.3. Note that historically is has been gravitating more towards 0.5.
• This correlation is lower than most of the coin in the cryptospace, and that
is why it's catching my attention and instinct of portfolio and risk manager.
• Compare this Ethereum's correlation to Bitcoin which is more around 0.7 or 0.8.
• On the news side, ChainLink has been selected by the Chinese BSN Network alongside other projects like Tezos, NEO, and EOS.
• The BSN Network is a chinese blockchain network that is built for Small Chinese tech enterprises.
• China has been investing heavily into blockchain technology.
And Some of you might remember the
news from the summer 2019, as it caused a massive pump of bitcoin price after the announcement.
• My guess is that China wants their developpers to work with best in class protocols
like ChainLink in order to inspire from their technology, and in a few years,
build and integrate their own version. • ChainLink Data feed are being used on larger
projects like, bancor for market making, synthetix for price feed, and is intended to be used by
Celsius Network to determine their interest rates. We must not disregard the current network
of apps using ChainLink, which is is quite large. • Another thing is really like about it is that
people are trying to short ChainLink : There is a fund called Zeus Capital that has
built massive short positions on the name. • It was already squeezed once last
year around 15$, but the fund keeps on doubling down on its position.
• With Gamestop shortsqueeze going, you understand better than ever how
things can get out of control when someone needs to close a large short position.
• I wouldn't be surprised if at somepoint shorts are being attacked and squeezed to the upside.
It's an eventually that exists and it could be adding some fuel, to an already crazy market.
• Competition on the Oracle side is also going to come from Cardano for example.
announced in december that it would partner with Wolfram Alpha in order to build oracle services.
• Wolfram has one the largest sets of data in the world to operate on. And the company powers both
Apple’s Siri and Amazon’s Alexa assistants and has deals across an entire spectrum of industries
• IOHK spent most of this year gathering the right people to work on oracles and evaluating
the market. Hoskinson himself said that this was both the right place and the
right time to dive into oracles. • I am not invested in Oracles solutions yet
and don't own ChainLink, but i'm starting to look at it as a potential evolution of my current
stakepool services. If you have knowledge about oracles, please feel free to reach out to me on
Telegram. By the way, if you want to stake your Cardano with me and support this channel, you
can find the link in the description down below.
Part #3 Where does ChainLink
stand in terms of risks ? • Alright so, using my risk metric : Chainlink
used to be in the Cheaper zone when I first highlighted it January,
• It as moved upward since, and is now slowly moving into the medium
risk zone. Meaning that If I were to buy, I would'nt necessarily buy very aggresively.
• For those of you that want the complete levels for each risk zones : they are as following :
○ Anything under $28.52 will remain on the Cheap zone
○ Above $28.52, Chainlink will enter a medium zone risk
○ And above $48.11, Chainlink will enter expensive risk zone.
• In terms of price target, 50$ wouldn't surprise me, and with the
ecosystem of smart contracts expanding so fast, I think Chainlink still has bright days ahead. It
could easily reach the $100 mark in my opinion. When ? I have no idea.
I will let the market
decide if and when it wants to get there.
• I will repeat it again, those are not direct
recommendations to buy or sell. I don't own the coin yet, and I use this model to gage where
an instrument stands in terms of relative expensiveness or cheapness.
• At the end of the day, i'm looking at things with a very open minded
approach, and i'm okay with the markets doing whatever it wants, whenever it wants.
• Remember that price dynamics are very unpredictable. We'd like to believe that price
is a reflection of how good a company is doing, even though it is somewhat true in the
long term, there are times were price is not a reflection of the real value and asset.
• You do have periods of euphoria and bubbles, and also periods of capitulation where assets are
very undervalued compared to their fundamentals. OK guys, I hope you learned something.
like this type of reviews please let me know in the comments, and don't confirm
to subscribe, it helps me so much. Now let's end off with the
french quote of the day: « Le plus beau moment de la vie humaine
est un départ vers des terres inconnues. The most beautiful moment of life,
is when you explore the uknown. So don't be scared to challenge your
mind on what you think you know, wether it is people, places, and beliefs,
it will ultimately make you grow.
That was jerome , thank you for watching Until next time