Last edited: Dec 29, 2021

In December, one of the worst performing coins, along with Cardano and Polkadot, is Chainlink (LINK). However, despite Chainlink’s uninspiring market performance over the past month, it is one of the most promising and unique blockchain protocols in the industry, and could be in for a massive year in 2022, even though 2021 seems to be closing in a rather disappointing fashion. In this article, we will briefly take a look at LINK’s distinct services and how it can become a top-10 blockchain network in terms of market cap in the long run.

What is Chainlink?

Chainlink (LINK) is an Ethereum token that powers the Chainlink decentralized oracle network. This network allows smart contracts on Ethereum to securely connect to external data sources, APIs, and payment systems. Chainlink greatly expands the capabilities of smart contracts by enabling access to real-world data and off-chain computation while maintaining the security and reliability guarantees inherent to blockchain technology. This means that Chainlink provides the best of both worlds: quick, efficient data transfer computation with the transparency, security, and reliability of blockchain networks.

How Does Chainlink Work?

Chainlink was designed to incentivize a global network of computers (or “nodes”) to provide accurate data to Chainlink’s oracles. There are many oracles operating today, including ones that provide price data across a wide range of assets, weather data, and location data. LINK, the underlying token of the network, is the token used to pay for services on the network and to incentivize nodes to perform verifiably honest work and provide accurate data.

The Upsides of Chainlink

We understand that weather data, price data, location data, and any other types of data that consumers use on a daily basis, are extremely valuable. They affect trading behaviors in financial markets, they dictate the fees Uber and other ride-sharing companies charge to their end-users, and they inform us whether we will need to carry an umbrella for the day. Being able to integrate these data with blockchain networks, as use cases and popularity of blockchain continue to rise, is crucial for the Web 3.0 takeover. This puts Chainlink in a favorable position, as it is the biggest blockchain data verifier and the front-runner in its respectively niche market.

It has already partnered up with AccuWeather, one of the biggest weather data providers in the world, to supply weather data to blockchain networks. Chainlink also recruited the former CEO of Google, Eric Schmidt, as a strategic adviser. His vast experience in a massive Internet conglomerate, particularly one that deals with massive number of datasets, will surely be valuable in finding more business opportunities and use cases for Chainlink. One particular business case could be for providing real-time sporting event data and odds for betting markets, of which users often lack a reliable and transparent data source.

Why had Chainlink Been Down in Prices?

Investors are valid in their concerns over Chainlink’s uninspiring performance in prices recently. Since November 10, after reaching intra-market high of $38.299 per coin, it has now dropped all the way to $20.664 as of UTC 23:17, December 29, 2021, representing close to a 50% decline in less than 2 months. Over the past 24 hours, moreover, Chainlink has dropped by more than 10%, the highest out of any coins trading on BTCC.

However, the short-term fluctuations shouldn’t scare investors away from Chainlink. Its services are unique among popular blockchain protocols, and it will only become more and more valuable the more common blockchain networks become in our daily lives. As Web 3.0 slowly takeover the age of Web 2.0, Chainlink will play an integral part of facilitating such growth, and so its market cap is almost guaranteed to be positively correlated with the growth of the entire crypto and blockchain space. Thus, we still see Chainlink as potentially one of the better long-term bullish investments in the crypto market.

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