Introduction to Chainlink

Chainlink is a network on the Ethereum blockchain that connects data sources to smart contracts, allowing blockchains to react to real-world events. The LINK token is used to incentivize network maintenance, similar to how ETH incentivizes Ethereum mining and maintenance, and BTC for Bitcoin.

Overview of Chainlink

Chainlink is an additional layer on the Ethereum network that focuses on providing data to smart contracts. By utilizing multiple data sources or 'oracles,' Chainlink decentralizes data feeding into smart contracts, preventing manipulation of the blockchain by bad actors.

In 2008, Satoshi Nakamoto introduced Bitcoin and blockchain, but Bitcoin faced limitations in inputting real-world data due to security concerns. This 'Oracle Problem' was addressed by Ethereum's introduction of smart contracts and oracles, but Chainlink further improved upon this by introducing a network of decentralized oracles.

Investing in LINK

LINK is not mined like ETH or BTC. Instead, node operators and data providers earn LINK for their activities on the Chainlink network. LINK has a maximum supply of 1 billion tokens, with approximately 44% in circulation as of July 2021.

LINK can be purchased on various exchanges such as Kraken, Coinbase, Gemini, Binance.US, and Gate.io. Transaction times for Chainlink can be as short as 15 seconds for a single block, but 20-30 block confirmations are recommended for immutability.

Additionally, investors can gain exposure to LINK through investment in Grayscale's Chainlink Trust, an ETF-like product subject to a minimum investment requirement and annual management fee.

Recent Developments

Chainlink was launched via an Initial Coin Offering in 2017, built on top of Ethereum. In April 2021, Chainlink announced the capability for off-chain computing, expanding the decentralized oracle network's adaptability to various use cases.