Chainlink, an $11 billion crypto project, explained.

Blockchains, in general, are very secure and reliable networks for exchanging value over the internet. Still, they cannot incorporate external data or transfer data to off-chain systems without sacrificing decentralization and security. Chainlink solves this problem by using secure oracles.

Chainlink expands the functionality of blockchains by connecting smart contracts to real-world data, events, payments, and more in a highly tamper-resistant and reliable manner. In simple terms, It’s a bridge between on-chain and off-chain systems. 

Source: cryptonews.com

Chainlink uses decentralized oracle networks made up of independent and Sybil-resistant nodes for high availability and manipulation resistance. It provides cryptographic proof of the oracle networks' overall security as every piece of data is digitally signed by nodes and stored on-chain. The network applies multiple layers of security such as cryptographic signatures, trusted execution environments, zero-knowledge proofs.

The Chainlink Network supports many price feeds live in production, securing billions in value for many leading Defi applications, Cefi companies, and other financial institutions. For example, Chainlink is used by crypto projects such as Aave, Synthetix, Celsius, Yearn.finance. 

Chainlink’s ability to connect with any API and perform any off-chain computation opens up many use cases. For example, Arbol uses Chainlink for weather data to create weather risk products, and Theta Network leverages Chainlink for viewership data to fight ad fraud for online content.

What is LINK?

Source: coinmarketcap.com

LINK, Chainlink's crypto-token, is built into the network itself and is the only currency used for critical network operations. For example, LINK is used to pay node operators that retrieve data. In this way, it also plays an essential role in moderating interactions between Chainlink users.

LINK is used as a deposit required by the smart contract creators and paid to the oracles. This fee is paid as soon as they complete the task. The smart contract creators keep the fee if an oracle fails to satisfy their end of the contract.

Is LINK an attractive investment now since it's 50% below the all-time high? I like LINK. It provides a solution to a unique problem that is not being addressed by many projects. Also, the partnerships Chainlink has with on-chain and off-chain companies are valuable assets to the project. However, at $25 per coin ($11 billion market cap), the risk/reward ratio is not attractive. I think the LINK intrinsic value is between $4 to $8, which I expect to revert to within the next few months.