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Chainlink (LINK) is a cryptocurrency project that aims to bridge the gap between blockchains and the real world by providing a decentralized oracle network. An oracle is simply a computer (a node) that gathers data from different sources and then sends it to a smart contract that needs this data on the blockchain.

The project aims to enable smart contracts to interact with real-world data and events. This unlocks a wider range of applications for blockchain technology, such as DeFi, supply chain management, and the Internet of Things (IoT).

Chainlink (LINK) is a decentralized oracle network, acting as a middleman between blockchains and the real world. Heres a breakdown of how it works:

Smart contracts, which are self-executing programs on a blockchain, cant directly access external data. Instead, they initiate a request through the Chainlink network to interact with real-world information. This request specifies the type of data needed and the desired security level.

Chainlink does not rely on a single data source. Instead, it utilizes a decentralized network of oracles. These oracles are independent entities responsible for retrieving data from external sources like APIs or web servers:

Based on the request and reputation scores, Chainlink selects a set of oracles to retrieve the data. Each oracle independently fetches the data from the designated source.

The retrieved data from different oracles is sent back to Chainlink. Chainlinks smart contracts, called aggregation contracts, play a crucial role here:

Once the data is aggregated and secured, the final, reliable data point is delivered back to the smart contract requesting it on the blockchain. Based on the received data, the smart contract can then proceed with its programmed actions.

LINK tokens are used to pay oracles for their data retrieval services. The requesting smart contract pays in LINK, and the network distributes the fees among the participating oracles.

This process ensures that smart contracts can securely access and leverage real-world data for their operations, enabling a more comprehensive range of functionalities within the blockchain ecosystem.

The LINK token is Chainlinks native cryptocurrency. It is used for:

Token Details

Total Supply 1,000,000,000 LINK

Circulating Supply 587,099,970 LINK

Current Price $15.00

Market Capitalization $8,811,260,156

This information is current as of May 17th, 2024, and the tokens price, market value, and available supply may fluctuate.

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Pros

Cons

Whether Chainlink (LINK) is a good investment depends on your risk tolerance and goals. Remember, this guide only provides a starting point for your research. Always conduct your due diligence before making any investment decisions.

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What Is Chainlink (LINK) And Should It Be In Your Crypto Portfolio? - UseTheBitcoin