The Chainlink token (LINK) is a byproduct or complement of (depending on how you look at it) a larger effort by the Chainlink team to build on the idea of smart contracts first developed by Ethereum. Smart contracts are a potentially game-changing innovation that eliminates the need for a middleman to enforce the terms of a contract.
In essence, they transform contracts from cumbersome pieces of paper open to a thousand interpretations into computer programs that only execute once specific conditions are met. No more need for expensive lawyers to get involved. No more months or years spent haggling in court over real or perceived contract violations.
The team at Chainlink realized, however, that the Ethereum model had a major shortcoming: it could only execute smart contracts within the Ethereum blockchain. Chainlink developers put their collective noses to the grindstone and came up with a method for reaching outside the blockchain to access relevant external data called “oracles.” The real-world implications of such a development are enormous. And Chainlink garnered much well-deserved attention in June 2017 when they took their concept live.
From Chainlink to LINK
A few months after launching the Chainlink decentralized oracle service the company launched the Chainlink coin (LINK) to significantly less fanfare. It’s possible LINK was a victim of the success of the company’s smart contract breakthroughs. But it’s also possible there were other reasons behind the coin’s strange and underwhelming launch. And we’ll get into those in a few moments. That said, LINK has managed to slowly work its way into the mainstream of the crypto-verse and is now firmly ensconced in the top 10 cryptocurrencies as measured by market cap.
The Chainlink Team
The core Chainlink team consists of celebrated veterans from different parts of the financial world.
- Sergey Nazarov/CEO – Sergey began his career at private venture capital firm FirstMark Capital out of New York. FirstMark invests in early-stage tech companies with a focus on big data, enterprise applications, financial technology, and e-commerce. Sensing the potential in blockchain technology Sergey left FirstMark in 2011 and founded SmartContract. In 2017, SmartContract was rebranded Chainlink. Sergey believes blockchain technology – and in particular, the smart contract – has the potential to alter economic activity in a fundamental way that is more equitable and honest.
- Steve Ellis/CTO – Steve cut his programming teeth at Pivotal Labs where he helped build scalable payment software applications among other things. He too is a believer in the transformative potential of the blockchain and the decentralization of financial activity that it represents.
- Dimitri Roche/Software Engineer – Nothing related to the crypto-verse gets very far without the efforts of highly talented software engineers. And Dimitri Roche is certainly that. Dimitri is another veteran of Pivotal Labs, where he helped develop the company’s digital engagement, cross channel marketing, analytic, and global research capabilities. He comes to Chainlink excited about the transformative potential of smart contracts.
- Mark Oblad/Head of Operations – Mark came to Chainlink after successful stints in hedge fund management at Gunderson Dettmer and contracts automation software development at Valcu. It was during his time building Valcu that Mark first became aware of the startling potential of smart contracts. And he brings the enthusiasm he developed there to his position at Chainlink.
Chainlink has a number of things going for it in its quest to reshape the blockchain landscape. One of the most important is the number and quality of its strategic partnerships and investors, including:
- Swift – Swift is the largest payment messaging service in the world. In 2016 it selected SmartContract (Chainlink’s previous name prior to rebranding) to help it develop its own smart contract technology, and in 2017 it formally announced a partnership deal with Chainlink.
- Framework Venture Partners – Framework Venture Partners is a Canadian investment firm that focuses on software companies like Chainlink that are involved in re-imaging the financial services landscape. Framework has invested heavily in Chainlink and is actively involved in championing the cause of smart contracts worldwide.
- ZeppelinOS – ZeppelinOS is a platform for the development, management, and implementation of smart contracts. The company has formed a strategic partnership with Chainlink wherein Chainlink will provide it with proven oracle services. This will allow the company to focus its efforts more intently on platform development.
- Request – Request Network is a decentralized network that leverages Ethereum smart contract technology to enable anyone to request a payment. They have announced their interest in partnering with Chainlink to provide oracle solutions for their decentralized network.
Chainlink also has ongoing relationships with numerous leading-edge research groups at world-class universities including ETH Zurich, Cornell and University College London.
What Is The LINK Token
The LINK token launched in 2017 got off to an inauspicious start. In part because it was overshadowed by the company’s highly touted and innovative smart contract system, as we mentioned earlier. And partly because of grumblings (never proven) that there was some less than above-board activity going on behind the scenes in the leadup to the LINK ICO. Those grumblings essentially revolved around 4 pieces of circumstantial evidence:
1) Lack of a Whitepaper
Who launches a cryptocurrency without first issuing a whitepaper laying out in minute detail the technological, commercial, and financial details of the ICO and the long term strategic vision for the token? Apparently, Chainlink does. Or at least they attempted to.
In the runup to launch demand for a whitepaper became such that Chainlink delayed the ICO for a week so they could compose and issue a whitepaper to satisfy investor demand. Not exactly the standard way of doing business.
2) Suspicious Pre-Sale Pooling
The pre-sale for LINK targeted high cap individuals only. At least that was the theory. In reality, there was extensive pooling of resources behind the scenes that provided certain groups of people with a workaround of the stated 100 ETH limit.
No one was ever taken to task for this, nor was anyone forced to return potentially ill-gotten gains. It all just sort of disappeared. And since Chainlink founder Sergey Nazarov doesn’t talk to the press, he was never held to account. If there was any account to hold him to.
3) The Sound of Silence
If the lack of comment from Chainlink during the ICO period was vexing the near-total silence from the company as well as the apparent lack of a marketing strategy in the weeks, months and now years since the coin’s launch have made more than a few investors question what it’s all about.
Hey, maybe the Chainlink folks are just shy. Or maybe they’re just so busy remaking the world with their smart contracts that they forgot that they launched a coin. Or maybe they just don’t believe in fancy-pants marketing and prefer instead to let the market itself sort everything out.
4) KYC was MIA
Chainlink was and is prohibited from doing business with residents of the US, China and Singapore. And yet if one wanted to participate in said IPO, all one had to do was check a little box stating that you really, really weren’t from any of those places.
Of course, more than a few of the team members of Chainlink happen to be residents of the US. Not that anyone is keeping track or anything.
As you can see there were some seemingly legitimate concerns raised in the leadup to and aftermath of the LINK ICO. With more than a few investors voicing concerns. But while it’s tempting to conclude that someone was up to no good, it might all have just been a sign that the company was in over its head and simply botched the launch. Only time will tell which reading of events turns out to be accurate.
How to Store Your LINK Coin
While LINK can, in theory, be stored on any ERC-20 enabled web or desktop wallet (such as the free internet-based MetaMask wallet or the Atomic desktop wallet) it is strongly suggested you store yours on a Trezor or Ledger wallet. Trezor and Ledger are small pieces of hardware. Essentially, small USB drives that you purchase separately and plug into your computer. Because you disconnect them and take them with you when you’re done, they can’t be hacked. The setup process is not complex and involves simply attaching the wallet to your computer and following a series of prompts.
Once the wallet is set up (which should only take a few minutes), you can go to whatever exchange is currently holding your LINK tokens and transfer them to your new wallet. The process is similar for both types of wallet. The only substantive differences are in the software you need to install and the fact that Ledger provides a “recovery phrase” and Trezor does not.
The Future of LINK
While the Chainlink smart contracts business seems destined for great things, the LINK coin itself seems to have been orphaned out of the gate. There is no strategic roadmap for it in the whitepaper that was eventually issued, on the company’s website or in any of their subsequent marketing materials.
So while the coin has recovered somewhat from its lows of 2018, it remains to be seen if it can find a long term purpose aside from its current limited role within the Chainlink smart contract ecosystem.