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Chainlink is a decentralised blockchain network. Commonly associated with LINK cryptocurrency, Chainlink has made great strides over the past few years. Based on the Ethereum blockchain, Chainlink enables the provision of smart contracts to securely connect to external data sources, APIs and payment systems.
SmartContract.com, which is Chainlink’s parent company, was formed in September 2014. The purpose of SmartContract, which was designed to help bridge gaps between external data sources and public blockchains, has been met since.
Their eventual solution to this problem was the Chainlink network. Having this network has paved the way for smart contracts to collect data feeds from any web API and data source.
LINK has its benefits as both a payment and work token. LINK is a versatile token, and it can be used to pay Chainlink node operators for providing Oracle services.
LINK was originally launched as a token in September 2017, with a $32 million haul achieved via the Chainlink ICO.
Initially, 1 billion LINK tokens were issued. 35% of these were then allocated to token sales investors, and 30% were given to the token’s parent company. This means that 35% have been held back as rewards for node operators and ecosystem operatives.
The Chainlink crypto features both on-chain and off-chain components. Moving forward, there are likely to be plans in the near future to integrate the service with all smart contract networks.
Advantages of trading LINK CFDs
Although cryptocurrencies hold serious value, they have become increasingly popular as trading instruments. Cryptocoins have therefore gained significant exposure and value over time, and this has resulted in a swell of capital into many of the big altcoins.
Investors have several options when entering the cryptocurrency marketplace, and CFDs (Contract for Differences) are one of them. CFDs are a type of financial derivative that enables investors to receive cash settlements based on the difference between open and closing trade prices.
Chainlink trading via CFDs offers several advantages over other forms of cryptocurrency trading:
- Cryptocurrency wallets are not required for CFD trading, therefore removing the need for storage.
- CFD contracts make it possible to leverage the position, gaining increased market exposure with limited capital requirements.
- Autotrading is feasible with CFD contracts. Traders don’t need to continually monitor the cryptocurrency market while trading on Chainlink coin.
- Another popular feature of CFD trading is short selling. Effectively, short selling means opening a sell position on a particular asset, based on the assumption the price will decrease over time.
Regular cryptocurrency exchanges do not feature any of these options.
What Influences Chainlink Price?
Firstly, overall market conditions will always have a significant impact on the price of any cryptocurrency. In recent years, cryptocurrencies have performed well during somewhat challenging market conditions for equities.
The volume of initial coin offerings will also have an effect on Chainlink price. In the case of the LINK crypto, its supply tends to be fixed, with 35% of the total supply of tokens yet to be allocated.
Chainlink trading also offers valid use cases as it attempts to solve specific problems related to blockchain communication. Oracles can be set up within the Chainlink crypto network to monitor virtually anything.
Ethereum generally retains a significant influence over the Chainlink coin as the system is still reliant on the blockchain of the second-largest cryptocurrency. While the developers of Chainlink hope to diversify the blockchain potential of the system in the near future, this has not been achieved yet.
Nonetheless, the excellent performance of other cryptos using the same blockchain protocol, such as Ethereum, bodes well for the performance of Chainlink. Basing tokens on this blockchain could well end up being a sound decision.
The overall cryptocurrency market sentiment will also have an impact on Chainlink price. Most of these tokens rise and fall together unless there is a particularly important factor that overrides this.
Demand for tokens can also influence the Chainlink price and other cryptocurrencies. Public perceptions of cryptocoins as a payment and investment mechanism can have a massive influence over the market.
However, it’s difficult to make any firm Chainlink price prediction going forward, as the cryptocurrency niche is generally considered to be significantly more volatile than other markets. This, in turn, can lead many traders to hedge their investments in the LINK coin.
Chainlink Coin Trading with AvaTrade
The LINK coin is one of many cryptocurrencies available for trading, and the qualities of the Chainlink coin make it a promising token. When coupled with the excellent opportunities associated with CFD contracts, Chainlink crypto can be a promising avenue for investors.
AvaTrade is an excellent place to begin trading Chainlink’s LINK token as well as other leading cryptocurrencies, including the crypto 10 index. This in part, is thanks to the wealth of information that is available at your fingertips. With daily market analysis, an intuitive education centre, free demo accounts, as well as outstanding multi-lingual service and support, AvaTrade covers every base for investors.
Chainlink trading FAQ
- What is the biggest challenge that Chainlink solves?
Chainlink is a popular cryptocurrency which is geared towards solving a major blockchain-based problem, that being communication to/from the blockchain. This is typically conducted through a series of sensors. Otherwise known as oracles, sensors can monitor virtually anything on the blockchain. They also expand usability, by providing an effective way to initiate smart contracts once parameters have been met. Owing to the centralised nature of oracles, they remain a weak link in the blockchain. If corruption, malfunction, or threats emerge, the whole blockchain network comes under fire. Chainlink is the first blockchain oracle network in the world.
- How can Chainlink smart contracts be used?
Chainlink smart contracts have many useful applications. These include government, authorisation and identity, utilities, supply chain, insurance, enterprise systems, gaming and random number generators, external payments processing, and DeFi (decentralised finance). Crypto-secured systems and networks can also benefit from Chainlink technology. On-chain and off-chain smart contracts enjoy crypto-secured functionality, with tamper-proof data, and censorship-resistance. From a practical perspective, smart contract adoption is highest among certain industries like the insurance industry, derivatives, and trade finance. The reason smart contracts are preferred in these industries is that they facilitate trustless contracts between clients and companies.
- What comprises the Chainlink ecosystem?
The Chainlink ecosystem is a global, integrated network made up of hundreds of decentralised apps (dApps), data providers, node operators, blockchains, and open source development communities. The biggest partnerships include: blockchain, DeFi, data providers, node operators, infrastructure, oracle start-ups, VRF, and NFT. Various decentralised finance (DeFi) applications including yEarn, Synthetix, and Aave are also powered by the Chainlink Network. Already, billions have been invested in these applications. This permissionless ecosystem for building oracles is available to anyone at any time. When you trade Chainlink CFDs, everything is bundled up into one financial instrument which can generate profits in rising falling markets.