ChainLink ICO Review – Connecting Smart Contracts to API

ChainLink is an oracle network that is completely decentralized, enabling others to create smart contracts in a secure environment. So long as someone uses an off-chain service or an API and a data feed, they can now provide their smart contracts with these services, as an oracle. It has an off-chain consensus method and on-chain data aggregation network for contracts, both of which are easy to use. Their ICO is quite new, but it is already developing a solid following, in part thanks to the positive reputation of ChainLink.

Project Overview

If an Ethereum or other such cryptocurrency smart contract hopes to replace or mimic financial agreements such as insurance and security, they will need to use APIs, data feeds, and a range of other technologies that aren’t included in the blockchain. Instead, they need to use an oracle, which is what ChainLink aims to provide. Essentially, what it does is enable the creator of a smart contract to work with the traditional banking system, payment solutions, and a range of data providers. ChainLink offers this through their LINK network.

It is the first time that such a decentralized oracle has been created. LINK supports Hyperledger, Bitcoin, and Ethereum, which is another unique feature. Best of all, it is immutable, offers trust, and is fully decentralized. The project also isn’t completely new, with SmartContract, which is ChainLink’s parent company, having been founded in 2014. By 2017, Gartner listed ChainLink as “2017 Blockchain Application Cool Vendor”. Additionally, the parent company has a partnership with Swift, which is an interbank messaging platform. In June 2017, a proof of concept phase was completed, and Swift became a ChainLink customer.

Smart contracts can only be executed using external data, which is incredibly challenging. This is what ChainLink aims to resolve.

Investment Potential

Users can purchase LINK tokens, with which data providers, online service providers, payment providers, and ChainLink node operators are paid. As such, it is a unique form of compensation. The tokens are important, because they make the network even more decentralized, while at the same time guaranteeing that data is accurate. Additionally, because the tokens are a form of currency within the network itself, they can become more valuable if the platform is used more often.

On July 21, 2017, the pre-sale program started, offering new users a 20% bonus. This ended on September 19, 2017. Between then and October 19, 2017, the crowdsale period was in operation, which had some very specific values, ranging from 2,600 LINK tokens for one Ethereum to 1,885 LINK tokens for one Ethereum. The token sale’s hard cap, meanwhile, was set at $32 million.

The distribution of the tokens was like this:

  • 35% (350,000,000) sold to the public.
  • 35% offered as an incentive to the ecosystem and to the node operators.
  • 30% offered to the company to continue development.

All tokens were distributed 24 hours after the crowdsale was completed.

The ChainLink Team

Just two people currently make up the ChainLink Team. They are:

  1. Sergey Nazarov, who is ChainLink’s co-founder and current CEO. Nazarov is known for his entrepreneurial spirit. He has been involved in blockchain for many years. Before he founded SmartContract, he founded the Secure Asset Exchange, which similar to CryptoMail and ShapeShift, two popular exchange networks and decentralized email services.
  2. Steve Ellis, who is ChainLink’s other co-founder and CTO. Like Nazarov, he is known for his entrepreneurial spirit and played a significant role in the setup of Secure Asset Exchange as well. His background is with Pivotal Labs, where he was a software engineer.

Meanwhile, ChainLink has also been able to attract a number of advisors with an excellent reputation. They include:

  • Ethereum Foundation member Hudson Jameson
  • Cornell Tech’s Professor of Computer Science Ari Juels
  • IC3 Director Andrew Miller

Additionally, the ChainLink team is made up of important external partnerships, including the World Economic Forum, Gartner, Cornell IC3 (Town Crier Oracle), and SWIFT. Additionally, Underscore VC and the Data Collective provide their support.

Opportunities

  • Smart contracts and blockchain technology can greatly improve through oracle. If properly implemented, it would be possible to complete a range of different types of contracts in a safe, trustworthy environment. Many expect that it is oracle that will push blockchain technology to the world.
  • SWIFT is used by some 11,000 different banks the world over. The fact that they have entered into partnership with ChainLink is telling. It also means that it becomes much easier to partner with other financial organizations.
  • Nazarov and Ellis are highly experienced in the field of blockchains and they have created highly successful ventures in the past.
  • There is a potential for a significant network effect because the platform will become even more beneficial for blockchain data fees. This essentially stops people from having to access different forms of data from many different sources.
  • It creates a lot of different business opportunities because it will enable a wealth of different industries to start using blockchain integration and better smart contract development.

Risks and Concerns

  • ChainLink is essentially made up of just two people. They have a lot of experience and a strong advisory team behind them, but they do seem to struggle with answering all questions and keeping people up to date. While understandable, there is a feeling that they may need to attract more staff.
  • There is a $32 million hard cap, which represents just 35% of all the tokens that are available.

Conclusion

Overall, the ChainLink ICO is great because it has real long term potential and can equally be used by those interested in flipping. Mainly, if implemented properly, it will ensure that “smart” contracts actually become smart. If you are interested in flipping, then ChainLink tokens are a good option because of the strong advisory team underpinning the company, and because of the SWIFT partnership, which really sets it apart. If you are interested in holding for a long time, ChainLink is equally beneficial because the company aims to solve a real problem, making it incredibly lucrative. It is very easy to find hundreds, if not thousands, of cases of people who have difficulties with the very issues that LINK aims to resolve.