What is Chainlink Crypto? Blockchain Middleware Solution

  • What is Chainlink Crypto? Blockchain Middleware Solution

    Under Polkadot, Chainlink is currently a cryptocurrency that is of concern to many crypto investors. When the average cryptocurrency was bearish during the last winter of 2018, Chainlink was able to show its existence as crypto that managed to break into the top ten of Coinmarketcap rankings.

    Chainlink (LINK) at present time writing valued at $ 10 with a market capitalization of $ 3,498,842,895. It is ranked eighth after Polkadot then ranked below Chainlink is Bitcoin SV.

    Chainlink Cryptocurrency Explained

    Starting from the problems in the blockchain is to get information from outside is a vulnerability by cheaters, the correctness of the information. Chainlink (LINK) came up intending to fix this problem.

    Simply put, Chainlink is a middleware in the blockchain that functions to connect blockchain and non-blockchain technologies - for example, connecting smart contracts with data feeds, traditional bank accounts, and web APIs.

    Chainlink tokens are called LINK. This is an ERC20 token that is used to pay Chainlink Node Operators when making transactions in the form of retrieval or providing data from off-chain to the blockchain.

    What is the solution offered by Chainlink?

    Chainlink is designed to provide solutions to blockchain problems that are often a problem in blockchain technology today, there are three points of solution from Chainlink.

    Connectivity

    The first problem in the blockchain is connectivity. Blockchain technology with the concept of decentralization often gets into problems, especially in connectivity with other technologies that are outside the blockchain. Direct connections with other technologies will compromise the concept of decentralization. Chainlink offers a solution to this problem.

    Scalability

    The second issue of blockchains is scalability. This problem can also occur in decentralized systems in blockchain technology. An increase in the number of users and transactions made reduces transaction speed. This has been tried to be overcome by implementing protocols such as Ripple and Cordel. However, implementing both protocols has the potential to sacrifice the decentralized system at the core of the blockchain to increase transaction speed every second. Chainlink is here to offer a solution to this problem.

    Privacy

    The third problem with blockchain is privacy. Blockchain technology is an open-source technology that is open to the public. This reason is what can create several concerns for business people who want to use a public blockchain. Because these business people have a lot of sensitive data and should not be known by others, especially competitors.

    These three main problems are major obstacles in the application of this technology in human life as a whole. This is where Chainklink is here as a solution that has great potential to solve all of these problems.

    How Chainlink works

    Chainlink like a bridge to linking one blockchain to another, but Chainlink is not a blockchain. Chainlink does not get profit from the mining process but from all blockchains that use their network.

    The way it works is that Chainlink will connect smart contracts with off-chain input in the form of data. The data entered into this smart contract will be used to issue off-chain output in the form of payments, data transfers, and ownership transfers. The incoming off-chain input data indicates that the conditions made during the contract creation have been met and can be continued to the next process.

    Simply put, the way Chainlink works is like a platform App Store and Google Play Store are middleware between parties to sell and use their applications on the platform itself.

    The profit earned by the App Store comes from all the applications listed in it. Meanwhile, in  Chainlink the profit obtained is not in cash but in the form of a token called LINK.

    Users who wish to purchase data via chainlink must use LINK tokens as payment. The value of the LINK token itself will depend heavily on exchange markets such as Binance and Exchange.

    Features Chainlink

    The Chainlink feature is very supportive of gaining customer trust, one of the features is the modular concept that is applied to each item which is made separately and can be updated.

    Chainlink also uses an external adapter that can be used by anyone and allows chainlink to connect with various existing smart contract platforms.

    Currently, the API that is widely used today is a centralized system that connects the off-chain (API) and on-chain networks to become a security vulnerable point.

    Therefore Chainlink tries to anticipate by developing several features including:

    Decentralization level

    Smart contract developers who wish to use the chainlink network must first select the number of nodes they want to use.

    Using one data node for a smart contract does not require a large amount of money, but the security risk is much greater. The more nodes that are used, the higher the level of security.

    Source of distribution

    This feature aims to further increase the level of security, nodes on the network can retrieve data from various sources, for example from Yahoo Finance and Bloomberg.

    Oracle distribution

    This feature development focuses on using multiple nodes for one contract. This can be achieved in a number of ways, from using multiple nodes to getting data from the same source. Another way is to use multiple nodes to get data from several sources at once.

    Aggregation

    With the Aggregation feature, smart contract developers can also choose the aggregation method in collecting data by nodes.

    The method in this feature is the average collection of data from various sources, focusing more on data that comes from reliable sources.

    Payment Penalty

    The smart contract developer can determine the amount of collateral at stake to ensure that the nodes used can collect data under the existing contract.

    This collateral can be said to be a kind of guarantee insurance for the contract if in the process there is an error in data collection or the data entered is inconsistent with data from other nodes that are also working on the same contract.

    Reputation

    To achieve the goal of this feature, Chainlink creates a scoring system that assigns scores to nodes based on many aspects such as the number of tasks completed, the total number of task requests, the average response time, and the total penalty payments.

    Nodes with good scores will get high ratings and vice versa. Reputation can increase customer security.

    Certificate Service 

    This feature is also very important. Service certificates provided by third parties to truly trusted Oracle providers will be proof that these providers can maintain the security of their systems.

    Chainlink price prediction

    In Chainlink's price history from 2017 to early 2019, there have not been many volatile changes, changes ranging from $ 0.3 to $ 0.5 based on data from the Coinmarketcap platform.

    The new movement started higher around June 2019 where the price gradually rose to $ 3 and continued to fluctuate up and down in this range until April 2020. Prices continued to surge to $ 8 in July and hit a high in August of $ 19.

    After hitting highs the price has slowly slid back down and is currently at $ 9 at the time of writing.

    Meanwhile, in the Tradingview platform, the LINK token was only recorded since March 2020, maybe previously LINK was not a popular crypto token.

    Then what about the potential value of Chainlink in the future? For investors, this is an interesting question because if in the long run, historical the value goes up, investors will get profit.

    According to predictions from Wallet investors who use the smart technical analysis method in the next one year, the LINK value can increase to $ 22,230, while the forecast for the next five years is $ 67,408.

    According to Wallet investors, if the LINK investment is currently $ 100, it will get a return of up to 67,408 US Dollars.

    For short-term predictions based on Wallet Investor, the changes tend to decrease and can reach $ 7 in mid-October.

    Image source Wallet investor.

    Meanwhile, the long-term prediction of Chainlink's value is expected to reach around $ 23 in July 2021 next year.

    Image source wallet investor.

    The prediction above is only an analysis based on technical data that is processed by Wallet investors to forecast future Chainlink prices, and it may not match what will actually happen.

    Meanwhile, the prediction from Digitalcoin also illustrates that there will be an increase in the value of LINK in the future, based on existing forecasts, until 2026 the price of Chainlink can reach $ 46. Slightly lower than the prediction from the investor's wallet which estimated it would reach $ 67.

    Based on the forecast that can be accessed on the Digitalcoin site, the forecast for 2020 is $ 15.15, 2021 is $ 21.63, 2022 is $ 26.98, 2023 is $ 32.2, then 2024 is $ 36.2, 2025 is $ 27.56 and 2026 is $ 42.02.

    Here Chainlink prediction by Digitalcoin

    Image source by digitalcoin.

    Digitalcoin uses a certain algorithm histoical data to forecast future Chainlink prices, this may be somewhat different from the wallet investor method that uses technical smarts.

    Meanwhile, the prediction from Gov Capital also predicts that the trend of future Chainlink value will increase, similar to the investor's wallet in 2021, the value of Chainlink is estimated to reach $ 19,510. If this forecast is accurate, investors who buy Link tokens now can get profit next year.

    Below forecast for one yea by Gov Capital

    Gov Capital takes a technical analysis approach in forecasting Chainlink prices, so that this does not reflect what will happen in the future, so it is said that forecasting is not investment advice.

    It is also very important for an investor to analyze what happened with Chainlink. News about Chainlink and its developments to users will determine the value of Chainlink in the future. As reported, Crypto.com has adopted Oracle Chainlink for Defi Wallet. Positive news can have a good effect on Chainlink's future value.

    Chainlink Short-term analysis 02 October 2020

    Today's Chainlink price change has decreased by minus 3.36% based on the Tradingview chart on the Poloniex exchange. This is a continuation of the bearishness of the previous day after the price hit $ 10, the price then fell to $ 9.2.

    Chart by Tradingview

    Using a simple technical tool trend line on the 1H time frame, which is the ideal time frame for short term analysis, illustrates that the bearish trend is still dominant for the short term.

    If the price can cross the $ 9.5 mark then the target resistance will be $ 9.7, which if this area is rejected, the rebound may continue to bearish to reach the lower trend line. The lowest possible price is $ 8.8. If this breakout occurs, it can reach the support at $ 8.6.

    Meanwhile, if we read the MACD indicator, we can conclude that the MACD histogram is below zero levels which means it is in a downtrend. Then look at the signal line at the minus 0.19 level with the MACD line at the minus 0.21 level. Ideally, this means that the trend is still downward, and even though the current candlestick is forming bulls, the MACD line has not yet crossed the signal line. This means that the Buy signal has not been confirmed.

    Now we see the RSI, which shows at the 43.87 level, this means that the trend is also decreasing because the RSI value is below the 50 scales as a separate line for uptrend and downtrend conditions.

    By referring to the three tools used in this analysis, the conclusion is a bearish trend so we are looking for opportunities to sell at the best price by looking at the confirmation of the MACD and RSI tools.

    Conclusion

    Chainlink is the link between blockchain and the real world, ranked 8th under Polkadot, which is predicted to increase in value in the future.

    Quite contrast with the prediction for Polkadot which is predicted to be of zero value in the future, but whether the price prediction will come true has not been answered.

    Because sometimes something happens outside the scenario so that the analysis or forecast can also miss expectations.