The Chainlink Coin Team believes that the main problem of modern intelligent contracts is inadequate interaction with the outside world. They believe that a secure network of oracles can solve this problem, and that is what their product is designed for.
“Most of the traditional contractual agreements that have been digitized and automated now use external data as proof of fulfilment of the contract terms and require the data to be passed on to external systems. When intelligent contracts replace obsolete contractual mechanisms, they become highly reliable versions of such inputs and outputs.”
In fact, Chainlink wants to increase the practicality of smart contracts in certain types of applications. This means that your market participants will be the providers and users of intelligent contracts. This is a pretty tight niche, but that does not mean they will not succeed.
In the world of blockchain technology, all developments are highly specialized, but the number of ways to leverage these technologies is increasing rapidly, including the market that needs smart contracts. They cite several types of smart contracts on which they will mainly focus their development: securities, insurance and trade finance.
The Chainlink system itself consists of two parts: a blockchain and a non-blockchain system. These two parts will communicate with each other during the work process. The system will ensure the correctness of the information provided by the oracles and allow them to work independently.
An Oracle may be for example the New York Stock Exchange that provides accurate information on trade or Visa, which handles and reports on the settlement of transactions. Chainlink Coin intends to combine all of these oracles in one system while acting as a companion whilst logging into that system.
To pay for non-business services, Chainlink will create a LINK token. A token is required to perform the functions of the platform, so the demand is directly related to the number of users. The actual demand will only be determined after the full launch of the system. If an insufficient number of users join the system, such a token has no intrinsic value, even if it has a speculative value.
In total, 1,000,000,000 tokens will be released. There is still no information about the distribution of tokens, which unfortunately does not allow us to analyze this important aspect.
The Chainlink Coin Team basically consists of two people: Sergei Nazarov and Steve Ellis. We can assume that they will hire workers in the process of product development, but their approach is, in any case, questionable. Ellis worked for Pivotal Labs.
Nazarov’s qualification is his long work in cryptocurrencies. Not really bad, but nothing outstanding. As many have said, the project’s success depends entirely on the demand for its token. In fact, existing smart contracts do not have enough flexibility and Chainlink Coin is one of the first companies to provide reliable external sources of information for smart contracts.
We need to understand that even if Chainlink becomes popular over time, there will be no demand for tokens for a good while, meaning that you can’t make quick money. In order for the oracles themselves to be motivated to join the network, the token must be of value.
However, as the oracle’s functionality and quality increase, the value of the token also increases. This is one of those tokens whose price can skyrocket after a successful launch. The developers won’t change the existing products, but their own product can perfectly integrate into the market, which is an indisputable plus.
How advanced is the project?
The parent company of ChainLink Coin was founded in September 2014. It was named “2017 Blockchain Applications Cool Vendor” by Gartner. Chainlink has a partnership with Swift’s Interbank messaging platform. In June 2017, they completed the concept of the first stage, where SWIFT has a payment client from ChainLink.
The LINK tokens are used to pay for data providers, project site operators, payment providers, and other online service providers. Smart contract users offset the data providers that use the LINK tokens. The vast majority of intellectual contracts require external data to carry out their processes.
The token compensation system will not only ensure increasing decentralization across the network but also accurate data. Since the LINK tokens are used as currency on the project platform, the more the ChainLink platform is used, the more valuable the LINK tokens should be.
With the help of oracles, blockchain technologies and a smart contract will be much more useful. People can carry out various types of contracts without supervision. The Oracle project could help the blockchain technology to achieve mass adoption.
The ChainLink partnership with SWIFT, a platform used by more than 11,000 banks around the world, could enable ChainLink to interact seamlessly with other financial institutions in the future. The team has been working in the blockchain area for several years on this crypto project.
A network effect exists because the ChainLink platform is more useful when serving as a source for chain data channels. This eliminates the need for users to access multiple sources for different types of data.
Overall, Chainlink Coin appears to be well-suited to both short-term resale and long-term potential. This is one of the projects that drive the blockchain-based business, and in which the intellectual contracts are indeed “intelligently” processed.
Alexander Weipprecht is the managing partner of Provimedia GmbH. As a trained IT specialist for application development, he has been advising leading companies on the following topics for more than 10 years: online marketing, SEO and software. Cryptocurrency is becoming increasingly important to businesses and investors. Through Coin Report and Krypto Magazin Germany, Alexander wants to give all people easy access to the subject matter.