Chainlink is the coin of the hour! While the market leader continues to fight the pressure of the bears, LINK confirms the performance of the previous days. But what makes the technology so unique? We take a look at the current market situation.
Bitcoin price current
At the time of this article, the No.1 crypto currency is at a rate of 9130 USD, which corresponds to a daily loss of 0.89%. For a few hours now, the bears have taken command and pushed the rate below support at 9200 USD. Now the focus is shifting to Wall Street. Should the S&P 500 have a bad day, the leading crypto currency could even fall below the important USD 9000 mark. Currently, the trading volume is around 16.4 billion, and investors lack the purchasing power for a price rally.
What are the Altcoins doing?
After the alternative assets were able to gain important market shares in the past few days, more and more projects are succeeding in making the leap from the first mover. On Thursday, Ethereum (- 2.49 %), Ripple (- 2.81 %) and Co. have to record smaller losses. Once again, Chainlink (+ 2.78 %) is an exception. With its next top performance, Chainlink defends position 8 in the crypto charts. But what makes LINK so valuable?
Digression: Smart Contracts
Smart Contracts are intelligent and verifiable contracts on the block chain, which become valid when certain conditions occur. This contract option can be best illustrated using crowdfunding as an example: If a certain amount of a crypto currency is deposited by a certain date, the initiator receives the money collected. The DeFi market is bursting with decentralized Smart Contracts, a revolutionary field with numerous use cases. However, Smart Contracts often require so-called “off-chain” data, i.e. data from the real world. A link is therefore required that translates off-chain data into on-chain data.
Oracles: Important translators
This is where the so-called “Oracles” come into play. These interact as “middleware”, an intermediary software that converts data from the real world into smart contracts. So far, so good… But what happens if the Oracles are faulty? The solution is: Chainlink!
Chainlink interacts as a decentralized network with the goal of making smart contracts on the block chain compatible with the real world. The project uses so-called Oracle Contracts. Through “Oracles” it is possible to feed external data records into the block chain. The currency for carrying out these data transactions is called LINK. In the long term, Chainlink wants to support other smart contract service providers in addition to Ethereum and is focusing on cross-chain transactions.
On-Chain Components and Off-Chain Components
The technology of Chainlink is based on the so-called on- and off-chain components, which fulfill different tasks. The on-chain components link the “Oracles” in the Chainlink system with the Smart Contracts. In a second step, the Oracles send the data records from the Chainlink block chain to other Smart Contracts on different block chains. The off-chain components of Chainlink contain the respective nodes in the ecosystem, which collectivise information from databases and save it in Oracle contracts.