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The Chainlink price is showing signs of a bullish onslaught approaching soon.
Chainlink price on the verge of enormous upswing The Chainlink price created several lower highs
and higher lows since February 20. Trend lines drawn along these swing points showed LINK was
consolidating in a symmetrical triangle pattern. The breakout on April 2 propelled LINK by 7%, but overwhelming selling pressure
pushed it back into this consolidation. At the time of video editing, the oracle token
was giving the bullish breakout another attempt. To do so, the buyers need to push past
the State Trend Resistance set up by the Momentum Reversal Indicator at $30.31,
coinciding with the breakout point. This move will confirm the buyers’ objective
and signal the start of a bullish run-up.
Adding credence to the upswing
is the SuperTrend indicator’s buy signal that spawned after the move on April 2. Further providing a tailwind to the Chainlink
price is the whale transaction count. This metric measures market participants’
transaction activity worth more than $100,000, and a spike could potentially represent
their investment in LINK tokens. The recent spike seen on April
2nd indicates the entry of such individuals and paints a bullish picture.
Additionally, the whales holding 100,000 to 1,000,000 LINK tokens indicate an interest in
LINK at the current price levels. As a result, the number of such investors has increased
6% from 251 to 267 from April 1 to April 3. While things seem to be looking
up for the oracle token, a failure to rise above the upper trend
line at $2.65 might signal weak buyers.
Such a scenario will soon result
in a reversal in momentum, dragging the Chainlink price toward the
immediate demand barrier at $28. Further persistence of selling momentum could result in a
10% downswing to the lower trend line at $25.03. A breakdown of the symmetrical
triangle’s lower boundary opens up the possibility for a 10% crash to
the MRI’s State Trend Support at $22.64. in the interest of brevity,Chainlink
price is giving the bullish breakout another try after dipping back into
the symmetrical triangle pattern. A decisive close above $30.31 shows
the promise of a 37% upswing to $41.63 Transactional data and whale activity
suggest a massive breakout attempt shortly. ChainLink has been getting
quite a bit of attention lately. So much so that LINK has risen to a market
cap of nearly $1 billion in market cap.
The catalyst for these gains was the launch of
Chainlink on the Ethereum mainnet in May 2019 and a Coinbase listing. Essentially, the project’s
goal is to create a decentralized oracle service. If they’re successful it could change smart
contract usage and effectiveness forever. In this Chainlink review, we will take a deep
dive on the project including the technology, adoption, use cases & LINK price prospects.
When smart contracts are mentioned nearly everyone thinks of Ethereum. And that’s
because when Ethereum was launched back in 2015 it contained something that took
blockchain technology to the next level. The smart contracts of Ethereum
meant that blockchain technology could be far more than just a means
for conducting financial transactions. Ethereum’s smart contracts expanded
the utility of blockchain massively. There was one problem with Ethereum smart
contracts however, and that’s the fact that they only work with data on their own blockchain. While
that still leaves them as a very useful tool, they aren’t nearly as useful as they could
Creating a way to include data from outside the chain would give smart contracts
an immense boost in the potential use cases. The founders of Chainlink saw this, and they
moved to fill the gap. ChainLink is being created as a way to use oracle’s to pull data
from off-chain sources. ChainLink oracles will be able to use data pools, application program
interfaces and other real world sources. It opens up the possibility for smart contracts to use any
data source at all, no matter what the source is. ChainLink will be extremely helpful to projects
that need offchain data to be really useful. By giving blockchains access to traditional
data sets, ChainLink seeks to be the bridge between traditional data and the
future of blockchain technology. With those basics set, let’s
have a more detailed look at what ChainLink is being developed for, and
how it can change the blockchain space. How ChainLink Works
The main function of ChainLink is to create a bridge between
on-chain resources and off-chain resources. This means there are two primary components
in the ChainLink architecture – an on-chain infrastructure and an off-chain
Let’s see how both work. On-Chain Functions The on-chain smart contracts are the
first part of ChainLink’s architecture. Included in the smart contracts are oracles
which are created to process user data requests. These oracles will take any user requests
for off-chain data that are submitted to the network using a requesting contract and process
them, sending them to the appropriate smart contract to be matched with an oracle that
can then provide the needed off-chain data. There are three types of contracts
that can help with matching: the reputation contract, the order-matching
contract, and the aggregating contract. The reputation contract ensures that the
oracle provider is reliable and trustworthy. If it is, the request is passed to the order
matching contract, which works to pass the requesting contract to an appropriate oracle
based on the service level being requested, and the bids from the oracles.
the aggregating oracle collects data from the selected oracles and delivers the
best result to the requesting contract. Off-Chain Functions
Off-chain components are the other part of the ChainLink architecture.
These are oracle nodes that exist off-chain, but are connected to the Ethereum
network. I say Ethereum network here because currently ChainLink is only capable
of interfacing with Ethereum smart contracts, but in the future it is planned to work with many
different networks and smart contracts. The bulk of the work is done by these off-chain oracles,
as they collect most of the data being requested. All of the data collected is
processed through ChainLink Core, which is the software that connects the
ChainLink blockchain with off-chain data sources. ChainLink Core is responsible for processing
data and passing it to the on-chain oracle. All of this work by the off-chain nodes
isn’t done as charity.
These nodes expect to receive payment for the data collection and
transmission. And they are paid, in LINK tokens. There’s a secondary function of off-chain nodes
that make them quite useful to developers. The off-chain nodes allow for the integration of
external adapters, which are like decentralized applications on the Ethereum network. External
adapters are written by developers to perform subtasks within the external nodes. This makes
data collection and processing more efficient. ChainLink’s decentralized nature and
difference from other oracle protocols are shown by the concepts of oracle distribution
and source distribution used by ChainLink. This decentralization helps ChainLink avoid
centralization and other security issues. Source distribution and oracle distribution are
the keys to the security and decentralization of the oracle network. Source distribution is the
concept that causes oracles to pull their data from a variety of sources.
This helps them keep a
good network reputation. And oracle distribution is the concept that has data requests contracted
to several oracles to maintain decentralization. The above figure shows the two level
distribution on the Chainlink network. However, it helps to take a
look at a practical example. Weather Application
A company creates a user called the Sunshine Day Weather
App. The user requires up-to-the minute weather data, and to get it there’s
a request submitted to ChainLink. The matching oracle locates three different
oracles to find and transmit the needed data, following the oracle distribution
methodology to maintain a secure network. Because the network also requires source distribution each of the oracles will
draw their data from different sources. We’ll call the oracles X,Y and Z. Oracle X gets
its data from Accuweather and Wunderground.
Oracle Y gets its data from the National
Climatic Data Center and Open Weather Map, while Oracle Z gets its data from
the National Weather Service and the National Oceanic and Atmosphere Administration. With this oracle and source distribution
the network remains totally decentralized, and Sunshine Day Weather receives
aggregated data from three reputable oracles who all receive their
data from different sources. One other benefit of this system is that
oracles are incentivized to remain honest, since their reported data will be compared with
the data from other oracles. If fraudulent data is reported the oracle would see its reputation sink,
and could face other network imposed penalties. Trusted Execution Environments
Trusted Execution Environments, or TEEs for oracles, were added to Chainlink in late
2018 when Town Crier was acquired by Chainlink.
Combining TEEs with decentralized computations
gives Chainlink an added layer of security for individual node operators. TEEs confer
the benefit of allowing all computations performed by a node private, even
from the node operator themselves. This increases the overall reliability
of the oracle network because it prevents any node from tampering with any of
the computations performed by them. ChainLink Use Cases
Quite possibly the biggest positive development so far at ChainLink is its partnership with the SWIFT
banking transaction network.
Let’s face it, SWIFT is one of the largest global financial networks,
and success with them could lead to many other partnerships within the finance industry from
banks to payment processors to insurance outfits. While SWIFT isn’t flat out using ChainLink,
it is developing the SWIFT Smart Oracle with the help of ChainLink, and that leaves it
possible for integrations between the two. Another positive is that
ChainLink has little competition, and even those that are working on blockchain
oracle development are far behind Chainlink. The LINK token was under pressure
throughout 2018, but that’s true of the entire cryptocurrency market. After
hitting a bottom in June 2018 it made a nice recovery and was powered even higher beginning
in April 2019 as traders and investors learned that Chainlink was launching on the Ethereum
mainnet. Since then the price is up roughly 400% ChainLink Partnerships
The partnerships that ChainLink has forged are a part of its
strength as well. The SWIFT partnership is the largest, but it isn’t the only solid
partnership already formed by ChainLink. It’s interesting, because it seems the team behind
ChainLink has focused on building partnerships rather than on marketing, and that’s a large
part of the reason the coin goes unnoticed by most cryptocurrency enthusiasts.
are the largest ChainLink partnerships to date: SWIFT: The massive interbank
communications network; Zeppelin OS: An operating system
that was developed specifically for creating smart contracts;
Request Network: An exchange platform that aims to be the standard
for exchanging fiat and cryptocurrencies; Signal Capital: A London based private asset firm.
Chainlink has been extremely active in adding new partners and node operators since the launch on
the Ethereum mainnet. It seems as if hardly a day or two goes by without a new announcement
of a partner joining to run a Chainlink node.
All of this has been extremely positive
for Chainlink, increasing the adoption of the blockchain even as the team continues
focusing on development rather than marketing. It appears that Chainlink markets itself, and new partners come looking for Chainlink
rather than the other way around. That’s a good sign for any type of business… Chainlink Community
Chainlink is fairly unique among blockchain projects in a second
way, and that’s how it has handled marketing. While many projects have focused heavily on
maintaining complete transparency and flow of information to users, Chainlink has instead
focused on the business of creating partnerships. The team does keep users informed, but the flow of information is often
sparse and spread out over time. You can see this in the social channels
of the project. On Twitter, Chainlink has 36,500 followers, which is fairly low for a
project that’s been around as long as Chainlink. Tweets can be sporadic too, with several
days spread between tweets at times. One of the largest communities on Chainlink has to
be their Telegram channel, which has over 12,000 members. This is where you can go to get the most
up-to-date information on Chainlink development.
On Reddit, which is considered one of the
top hangouts for cryptocurrency enthusiasts, the Chainlink subreddit has
just over 11,000 followers. Posts are made daily and there are a good
number of comments on each post, but the conversations are almost totally from users,
with little involvement from the Chainlink team. LINK Token The LINK token rallied strongly right after
its ICO and by October 2017 it reached $0.47. After dropping from that high it rallied
again in December 2017 and January 2018 along with the rest of the cryptocurrency
markets, hitting a high of $1.35 in January 2018. It dropped in 2018 along with the rest
of the market, hitting a low of $0.1647 at the end of June, but by September 18,
2018 it recovered and was trading at $0.2872 and was the 50th largest coin by market
cap, with a market cap of $100,530,182. From September 2018 through May 2019 the
price of LINK remained roughly between $0.25 and $0.50 as the crypto markets began
a slow recovery. May 2019 is when the price really took off as investors were encouraged by
the launch of Chainlink on the Ethereum mainnet.
On May 1, 2019 LINK was trading at $0.476462 and by June 29, 2019 it hit its all-time high
of $4.54. It pulled back to the $1.60 area by September, but has been climbing steadily since
and as of October 27, 2019 it is trading at $2.72. Buying & Storing LINK
In the past, if you wanted to purchase LINK yourself you needed to do so with BTC or ETH
as there were no fiat purchases available for the token. However, it was recently added on Coinbase,
and can now be purchased there using USD. Binance is still the best exchange to purchase
LINK from though as the bulk of the trading volume is on that exchange. You can also buy
at Huobi, OKEx, and Mercatox as well as dozens of other small and medium-sized exchanges.
In terms of LINK liquidity, it is pretty well spread out across all of the exchanges
where it is listed.
This means that you are not dependent on the liquidity from any single
exchange which further reduces the risk. Looking at the individual orders
books on the likes of Binance, they are quite deep and there is
a reasonable level of turnover. This means that you would be able to place
large block orders without much price slippage. Once you have your LINK tokens you will
want to keep them in an offline wallet. Give that these are ERC20 tokens any wallet
that supports Ethereum will do. These include wallets such as MetaMask or MyEtherWallet.
So how is the core development of Chainlink looking? Well, the best way to get a sense
of this is to look into their public GitHub. By observing the total commits in the
repositories, you can get a rough sense of general development output.
Below are the total
commits to the core repository over the past year. As you can see there has been a
pretty regular stream of updates over the year so things are still active.
Compared to other projects in the space, Chainlink comes in at about
60 in terms of total commits. So while the development output is not as
extensive as some of the other projects that I have seen, it is still reasonable.
If you want to keep up to date with these developments then you can head on
over to their official Gitter channel. Chainlink’s Future
ChainLink has not released a formal roadmap, so we can’t be
positive what the next developments will be.
Actually, lack of communication from the
development team, along with a lack of marketing for the project, has been one of the
biggest frustrations in the ChainLink community. It’s well known that ChainLink founder Sergey
Nazarov prefers to work behind the scenes, and is not one for public appearances.
That has been improved over the past year however, with Chainlink increasing the amount of
information it provides to the user community. It could still do better though. Currently
the team posts to Twitter fairly frequently, but the blog is updated pretty infrequently.
The best source of information is Telegram. The value Chainlink brings us is in the ability
to provide provably reliable oracles that are able to be combined in an efficient
and secure manner into oracle networks.
The ongoing work of Chainlink is to achieve
this goal by allowing individual users to select individual nodes of the highest
quality and then aggregate the nodes into oracle networks that are Sybil attack
resistant. Then Chainlink provides the security measures to ensure these networks can
function as reliable smart contract triggers. One method is used by the Chainlink network
to allow its users to select the highest quality individual nodes is by providing
the necessary data that shows how well the nodes are currently fulfilling requests, and how
well they have fulfilled requests in the past.
The Chainlink Explorer is the means to make sure all of
this data is available to users. It was launched in May 2019 along with the
launch on the Ethereum mainnet and is designed to provide the insight into the function of
Chainlink nodes in two primary dimensions: Detailed information regarding each
node’s fulfillment of user requests. This includes both the off-chain
activity and the on-chain results, and it gives the smart contract developers
critical data regarding how well nodes and oracle networks are performing.
Reliability and speed data for every node connected to the explorer are aggregated
for both on-chain and off-chain activity. This allows the Chainlink developers to begin
to understand how a reputation system would work within the Chainlink network, with the hypothesis
being derived from real transaction data. The Chainlink team is planning on expanding the
capabilities of the explorer to provide deeper levels of insight regarding the operation of each
This will include various metrics about node reliability and speed, which dApps and
contracts have used a particular node, and data about each node’s fulfillment of commitments.
As real transactions increase on the mainnet the team expects to have an increased amount of
verifiable proof for each oracle’s reliability, giving users and increased
insight into oracle performance. Once the team has been able to
create a data-driven framework for users to choose node operators, they will be able to divide the nodes into
oracle networks that achieve decentralization. In order to reach this level, the team is working
on levels of aggregation across oracle networks, looking to provide the needed security and
efficiency expected from such oracle networks. Threshold Signatures
One step in this direction was a new approach to the utilization
of threshold signatures on Chainlink, which will allow the team to create oracle
networks that can contain thousands of nodes. The main benefit of this threshold signature setup
is that it allows oracles to have their signatures verified on-chain which provides added security
and it does so in the most efficient manner. Making large oracle networks efficient
is a desirable goal because it will be a preferred method for offering reliable
inputs for high-value smart contracts.
Smart Contract Inputs
Besides creating efficient, secure and highly decentralized oracle networks, Chainlink is also trying to become the largest
source of smart contract inputs and outputs. One of the goals of achieving this state is to
make smart contract development as rapid as web application development is today. Similar to the
way web developers are able to draw from a large pool of APIs and data streams, smart contract
developers will also be able to draw from a collection of inputs and outputs, if the Chainlink
team is successful in achieving this goal. This would make Chainlink the go-to
blockchain for developers and smart contracts to find pre-made inputs and
outputs that can rapidly be implemented in dApps or that can securely and easily
accept specific input/output requests. Since Chainlink is far ahead of any other
oracle network of its kind, achieving these goals could cement Chainlink’s place within
smart contract development and execution. Conclusion The ChainLink project isn’t the easiest
to come to grips with, but once you do it’s easy to see how it can benefit the
blockchain ecosystem massively going forward. Blockchains by themselves are
very limited, and they require oracles to unlock their full potential.
Because ChainLink is one of the few projects working on oracle development they could easily
become an industry leader for years to come.
The lack of marketing has caused concern
among the ChainLink community, but that is offset by the partnerships being forged by the
ChainLink team. Honestly, if they are successful with SWIFT they may not need marketing and
will become a billion-dollar whale within the financial services community regardless.
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