- Chainlink is a significant decentralized oracle network in the blockchain ecosystem
- Blockchain technology has few limitations when it comes regarding the input of data
- Chainlink’s oracle network helps bridge the gap between the blockchain and the real world
- Chainlink has the potential to become a widely adopted blockchain network due to its decentralized oracle
Chainlink (Link) is currently the fourteenth largest cryptocurrency in terms of market capitalization, as per CoinMarketCap. Bitcoin is the first crypto asset introduced in 2009 by Satoshi Nakamoto. Since then, the entire blockchain ecosystem has seen tremendous growth. Amid the global COVID-19 pandemic, the whole blockchain and cryptocurrency ecosystem has captured immense popularity globally. Blockchain technology has few limitations, which Chainlink can solve.
Limitation of Blockchain technology
Blockchain is the technology underlying Bitcoin and other virtual currency. Technology is essential for digital assets as it protects from hacking, changing, and cheating the system.
However, there are few limitations of the technology. Notably, blockchain is inherently closed off from the real world. Indeed, the factor is great in terms of the security and integrity of the entire ecosystem. However, the factor limits the input data they can accept.
Chainlink can remove the limitations of blockchain
Blockchain systems can see what is happening in the outside world, but it requires a bridge for that. However, in order for the technology to work, it is challenging to bring the input from a single source. If such information is conveyed, then the system will need to rely upon a centralized source of data, which goes against the nature of the ecosystem.
However, Chainlink being a decentralized oracle network, claims to solve the issue.
Significance of decentrlized oracle in the blockchain sector
Chainlink is a decentralized oracle network poised to play a significant role in the blockchain ecosystem. Indeed, the oracle bridges the gap between the real world and the world of blockchain. What blockchain does is great, as it provides decentralization, secure ledger for transactions.
Blockchain is not great at taking inputs for things happening in the real world. Indeed, the main purpose of Chainlink is to give input on a variety of external sources of data.
In contrast, Chainlink seems to be an important project in the cryptosphere, as the industry is continually growing. Such a decentralized oracle is considered as a key to the long-term stability and viability of the industry. Indeed, it is expected that Chainlink has the potential, and it could become the industry standard as the more broadly used blockchain-based oracle network.
Link can provide input to smart contracts
Numerous off-chain factors have influenced the crypto market. Such factors include fiat currencies and credit cards. Notably, factors like the weather and sports news also influence the market. Following the scenario, Chainlink offers input to smart contracts.
Ultimately, such inputs help smart contracts to respond to a wider range of inputs. However, Bitcoin blockchain can potentially process a small range of outputs. Simultaneously, other altcoins like Ethereum have the potential of processing a wide range of inputs. It is worthy to note that Chainlink is established on the Ether blockchain.
LINK helps Chainlink’s growth
LINK, launched in 2017, is the native cryptocurrency of the Chainlink blockchain. The crypto is similar to other crypto assets. However, the token helps finance the blockchain for its growth.
LINK was established with a value of $1. At press time, LINK is trading near the price level of $24. However, until 2019 the value of the currency remained $1, but since 2020 investors began to see the potential of the cryptocurrency. On the other side, the token has also seen a tremendous surge in its market capitalization. In the current scenario, the token has a total of $1.36 billion worth of market cap.
According to experts in the cryptosphere, investment in LINK means investment in the potential of Chainlink. Ultimately, such investment helps blockchain infrastructure grow.
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