What Is Chainlink? An Explanation and Future Price Outlook
3 min read · · Korean original
Contents 5
Hello, this is Bitpunk! In this post, we'll look at what Chainlink (LINK) is, what it's used for, and its future price outlook.
What Is Chainlink?
Chainlink is a decentralized oracle service that supplies external data to smart contracts on Ethereum. Simply put, it acts as a bridge that brings real-world data onto the blockchain.
Blockchains are built to keep strong security internally, but they have no way to safely bring in data from the outside.
Traditional databases handle this through centralized oracles, but decentralized projects such as DeFi need to receive this data in a decentralized way. Otherwise, a data provider could manipulate it and wipe out the project's decentralization in one stroke.
Chainlink is regarded as the best-known and most secure of all the decentralized oracle projects in existence.
What Is the Chainlink (LINK) Coin?
Chainlink uses the LINK coin to maintain the project's security and reliability. The LINK coin is often just called Chainlink, but
strictly speaking, what we trade is the LINK token, which is then used on the Chainlink platform. LINK is used to pay rewards to the node operators on Chainlink.
How Chainlink Works
First, a data request comes into the Chainlink node network. For example, something like "I want to know the result of yesterday's match between Tottenham and Arsenal."
On receiving this data request, a Chainlink node asks for a certain amount of LINK in return, and if its bid succeeds, it sends the data to the requester.
LINK Coin Price Outlook
Chainlink is currently the leading project in the decentralized oracle space. The total supply of LINK is 1 billion coins, of which the foundation holds about 300 million, and about 350 million were sold through the ICO.
As the DeFi industry continues to grow, demand for oracles looks set to increase, and with it, demand for the LINK coin is also likely to rise.
Wrapping Up
To sum up, Chainlink is an oracle that supplies data to all kinds of decentralized projects in a decentralized way.
It uses LINK as its native currency, and as demand for decentralized oracles grows, the price of the LINK token may rise as well.
However, the price of the LINK token can also fluctuate with the overall crypto market and its trends, so it's always a good idea to understand the broader market first.
