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How to buy ChainLink and how it works
How to get started buying and selling ChainLink (LINK) in India.
ChainLink is blockchain middleware that aims to connect smart contracts with real-time information from off-chain resources, for example, banks and stock exchanges. This allows smart contracts to access data feeds, application programming interfaces (APIs) and traditional bank payment systems that operate outside the blockchain infrastructure.
ChainLink’s ecosystem revolves around the LINK token and the LINK network. How do LINK tokens work and how can you buy or trade them in India? Read on to find out.
Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific
provider, service or offering. It is not a recommendation to trade.
Where to buy ChainLink
LINK tokens are available on a number of cryptocurrency exchanges around the world, such as the following:
How to buy ChainLink: Your step-by-step guide
You can buy LINK tokens directly with fiat currency (INR, for example) by:
- Going to an exchange like Binance
- Selecting “Buy Crypto”
- Choosing INR as your payment currency and LINK as the cryptocurrency you want to buy.
Alternative, you may find it more cost-effective to buy a widely traded cryptocurrency such as Bitcoin (BTC) or Ethereum (ETH) and then trade that currency for LINK tokens. The basic process for this alternative option, assuming you have already purchased BTC or ETH, is outlined below:
Step 1. Create an account on a cryptocurrency exchange that allows you to trade LINK
You’ll need to provide your name, email address, phone number and proof of ID to register for an account. It’s also a good idea to setup two-factor authorisation to provide an extra level of security.
Please note that you’ll also need to buy or already own another cryptocurrency (such as BTC or ETH) before you can trade it for LINK.
Step 2. Deposit funds into your account
The process you’ll have to follow to deposit funds into your account varies depending on the cryptocurrency exchange you choose. For example, Binance users can click on “Funds” and then “Deposit” in the menu at the top right of the screen.
Step 3. Buy LINK
The last step is to exchange BTC or ETH for LINK on your chosen exchange. Once again, the process varies depending on the exchange you choose, but when trading on Binance you’ll need to do the following:
Find the currency pair you want, such as LINK/ETH. Enter the amount of LINK you want to buy in the box provided and choose the best available market price or your own limit. You can then review the total cost of the transaction and if you’re happy to proceed, click “Buy LINK”.
ChainLink wallets
ChainLink coins are ERC20 tokens that exist on the Ethereum network. As a result, they can be stored on any Ethereum-friendly wallet, such as the following:
What is ChainLink and how does it work?
Launched in 2017, ChainLink is an intermediate blockchain that aims to connect blockchains with other off-chain applications. One drawback of smart contracts is that because they’re based on information secured on a blockchain and because of the way miners reach consensus around blockchain-based transaction data, they can’t interact with external resources such as data feeds and payment systems.
Smart contracts
Smart contracts are self-executing contracts executed on decentralised infrastructures and with the terms of the agreement written into cryptographic code. Because they exist on decentralised networks, such as a blockchain, smart contracts cannot be altered and therefore create a relationship that doesn’t rely on trust.
ChainLink acts as a fully decentralised oracle network to help connect smart contracts with external resources, off-chain payments and APIs. The potential applications for this are many and varied, and include connecting smart contracts with all manner of essential information, such as the following:
- Central bank interest rates
- Current exchange rates
- Off-chain payment methods
- Shipment and customs data
- Sports scores
- Weather forecasts
For example, let’s assume that there’s an Ethereum smart contract that needs to make a payment through PayPal. There’s currently no compatibility between Ethereum and the PayPal API, which is where ChainLink comes in. By linking the smart contract with the PayPal API, it can ensure fast and secure payment.
What to consider before buying LINK
- LINK availability. The total supply of LINK tokens is one billion, and at the time of writing, there were 365 million tokens in circulation.
- Use. LINK tokens are the cryptocurrency of the ChainLink network. When any company that operates a data feed, payment service or other useful off-chain API connects them to smart contracts through the ChainLink network, that company will receive LINK tokens in exchange.
- Potential. The value of the LINK token depends on the takeup and popularity of the ChainLink network. Take a look through the company’s whitepaper and consider the real-world applications for ChainLink to help you decide whether it could be a worthwhile purchase.
- Competition. While ChainLink was the first to announce a service of this kind, other platforms have launched similar technology and may compete for market share.
- Future developments. ChainLink aims to help create new standards for an open source smart contract ecosystem, solve many of the problems inherent to smart contracts and help pave the way for real world blockchain adoption. It is an ongoing process without a fixed end goal, so ChainLink doesn’t publish roadmaps the way other cryptocurrency projects do.
- Partnerships. It’s worth checking for news of any commercial partnerships ChainLink has in place. For example, it’s already established a partnership with global financial messaging service provider SWIFT to develop the SWIFT Smart Oracle.
FAQs
Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly
volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of
future performance. Consider your own circumstances, and obtain your own advice, before relying on this information.
You should also verify the nature of any product or service (including its legal status and relevant regulatory
requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may
have holdings in the cryptocurrencies discussed.
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