September 14, 2021

How to Invest in ChainLink

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ChainLink is currently the 15th-largest cryptocurrency by market cap. Curious about the growth of this promising oracle network? Find out how to invest.

ChainLink has some exciting developments and applications in smart contracts and decentralized finance.

As such, many investors are wondering how to buy ChainLink. And is it a good investment?

In this article, find out how ChainLink works and some of its most exciting use cases and partnerships. Then learn how you can invest in this up-and-coming cryptocurrency.

Is ChainLink a good investment? With hundreds of partnerships, plenty of existing use cases, and a promising future for smart contracts, ChainLink's growth appears promising. If you're hoping for LINK to hit $100, consider hanging onto it for a while. And keep in mind, no investment is ever guaranteed.

ChainLink is a decentralized oracle network that fulfills a unique function in the cryptocurrency and blockchain universe.

Oracle networks such as ChainLink help provide real-world data to smart contracts on the blockchain. You can think of smart contracts as immutable contracts that run on the blockchain, operating on an if-then framework.

Example of a smart contract: Let's say Duane agrees to pay Mike a 3.5% fee in order to borrow $5,000 worth of Bitcoin from Mike for 180 days. Using a smart contract, this agreement can run via code and math on the blockchain, rather than relying on a third-party financial institution to enforce it (and likely charge extra fees).

In some cases, the smart contract relies on real-world, off-chain data. Off-chain data includes things like real estate prices, weather data, stock market fluctuations, and more.

That's where ChainLink comes in. ChainLink gathers data from the real, external world, and translates this data onto the blockchain, where it can be used for smart contracts, predictive analytics, data reporting, and more. We'll take a look at some of these use cases in the next section.

Why Invest in ChainLink?

Now that you understand what ChainLink is, let's look at some reasons why investing in its cryptocurrency LINK may be a good idea.

1. Smart Contracts - A Pick & Shovel Strategy

Many people think ChainLink may be the "pick and shovel play" of the smart contract ecosystem.

In the world of cryptocurrency, no one knows yet which smart contract platform will strike gold. It could be Ethereum, Solana, Cardano, Polkadot, etc.

If you want to invest in the future of smart contracts and decentralized finance (DeFi), you could hedge your bets by buying all of them. Or, you could simply buy ChainLink.

The smart contract race has many competitors. But in the world of oracle networks, ChainLink is really the only widely used technology of note.

If any of the competing blockchains above want to win the smart contract competition, they will need to utilize off-chain reporting, and ChainLink remains the biggest, most time-tested player in that space.

What is a pick-and-shovel play?
During the gold rush, many enterprising businessmen made money not by mining gold, but by selling picks and shovels to the miners. This inspired an investing strategy known as the "pick and shovel play".

The idea is simple: If you can identify a profitable trend, you can make a generous sum investing in the "picks and shovels" necessary to support or sustain the larger trend as a whole.

2. ChainLink Boasts Major Partnerships

ChainLink has some of the biggest and most impressive partnerships in all of the cryptocurrency world. Everyone from Google to Oracle continues to partner with ChainLink to solve real-world problems.

As of writing, ChainLink has secured over 600 partnerships, collaborations, and integrations. In fact, separate unofficial website has popped up to offer a comprehensive list of them all.

These partnerships signal that ChainLink has near-unlimited potential in multiple different sectors, a few examples of which are covered below.

3. New Use-Cases for ChainLink

With its ability to translate real-world data onto the blockchain, new use cases are constantly emerging for ChainLink in many different sectors, such as:

Real Estate - SmartZip recently announced the launch of a ChainLink node, which will allow them to supply predictive pricing models and proprietary real estate data for property prices, rental rates, regional trends, and more on the blockchain.

Insurance - ChainLink's co-founder, Sergey Nazarov, has repeatedly discussed the potential for ChainLink in the world of insurance. ChainLink can give insurance contracts access to external data, like IoT sensors, web APIs, and satellite/drone imagery, that can trigger a smart contract.

Recently, Etherisc partnered with ChainLink to deliver crop insurance in Kenya.

Weather - World Weather Online has also announced a partnership with ChainLink, where they'll be using their own node to bring weather data onto the blockchain. WWO had this to say about further ChainLink use cases:

Some of the initial use cases we already see emerging on top of blockchains, which require high-quality weather data, include various types of smart contract-based parametric weather insurance products that allow farmers to hedge against unexpected droughts, homeowners to protect themselves from natural disasters, supply chains to cover the possibilities of late marine-based shipments, and much more.

How to Buy ChainLink

These days, investing in ChainLink is easier than ever, as it's one of the top 15 cryptocurrencies by market cap, and thus available on a growing number of exchanges.

Here are our two favorite places to buy ChainLink:

BlockFi - If you're looking to hold your ChainLink for the long term, consider BlockFi, because you can earn interest on your ChainLink.

Over time, compound interest like that can make a big impact on your investing gains. You're basically getting paid while you wait for further capital appreciation.

Read more: BlockFi Review

Coinbase - Compared to BlockFi, Coinbase has a much wider variety of cryptocurrencies to choose from. For this reason, Coinbase could be a great choice if you want to invest in ChainLink, but also want to dip your toes into some other cryptocurrencies while you're at it.

However, Coinbase's fees can really add up, so you probably don't want to do too much trading in and out of your position if you choose to invest there.

Coinbase

Earn $5 in bitcoin for getting started on Coinbase

Personalized $5 reward offer is displayed after account creation. Limited time offer and while supplies last. Offer available to new users who have not previously verified their identification. Offer not available to new users who were referred to Coinbase through the Referral Program or who have previously opened an account using different contact information. Coinbase may update the conditions for eligibility at any time, in its sole discretion. See Terms and Conditions.

Read more: Coinbase Review

Binance - Binance and Binance.US have some of the lowest trading fees on the market. Plus, they support more cryptocurrencies than most of their competitors. You can buy LINK on both Binance platforms.

Due to its data-intensive interface, Binance is best for experienced investors and crypto enthusiasts.

Read more: Binance Review

Bottom Line

All investments have their risks, and cryptocurrencies are especially volatile. As a general rule of thumb, you should never invest more than you can comfortably lose, and be sure to do plenty of due diligence.

All of that said, ChainLink offers many more use cases and partnerships than a lot of other altcoins and highly speculative cryptocurrencies. Its utility continues to be proven as it launches new undertakings with large blue chip companies like Google.

For investors looking to make a bet on the future of smart contracts, ChainLink may be an attractive opportunity.

Write to Corbin Buff at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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