How to Buy LINK Tokens in Canada

“Chainlink was created to bridge the gap between external, off-chain data and blockchain, on-chain data.”

Founded in 2017, Chainlink was launched by the San Francisco-based tech company, Smart Contract. Its co-founders are Sergey Nazarov (CEO) and Steve Ellis (CTO). LINK is Chainlink’s native cryptocurrency.

What makes Chainlink unique is that it bridges the gap between on-chain and off-chain data, effectively allowing blockchains to interact with external data sources, payment methods, and more. With Chainlink, blockchains can now tap into data points that do not exist in the blockchain. This is important because blockchains typically work in silos. As a result, Chainlink will help amplify the decentralized finance ecosystem. If you’re looking to buy LINK in Canada, consider buying from Netcoins. With 0% funding fees, free cash withdrawals and live customer support seven days a week, you’ll find it a breeze to buy LINK.

What Can You Do with LINK?

While you can use bitcoin to buy goods and services or use ether to execute smart contracts and pay miners for maintaining the Ethereum network; Chainlink tokens are simply used to pay “node operators” in the Chainlink network. These node operators connect to the Ethereum network and collect user-requested data that lives off-chain. On top of that, they also ensure that the data is accurate and relevant. For this work, the nodes are rewarded LINK tokens, Chainlink’s native cryptocurrency.

How Does LINK Stand Out From Other Cryptocurrencies?

LINK is an ERC-20 token, which means it’s compatible with other cryptocurrencies and smart contracts that also live on the Ethereum blockchain. Like we mentioned earlier, LINK is used to incentivize Chainlink node operators rather than being used for everyday purchases, like bitcoin or for executing smart contracts, like ether. Because it’s an ERC-20 token, you can’t mine LINK (like you can with bitcoin, or litecoin). Instead, the Chainlink team decides which node operators can validate information, making it a centralized token (unlike Bitcoin which is decentralized because it’s not owned or managed by any one party).

Another distinguishing factor is that Chainlink is not trying to compete with Ethereum (or other blockchains and their associated coins and tokens) as much as it’s trying to compliment them. Chainlink’s goal is to continue growing and expanding its support for other blockchains, which in turn help to create new use cases for smart contracts and growing the decentralized finance ecosystem.

Related article: How to Buy Ethereum in Canada

LINK has a maximum supply of 1,000,000,000 LINK tokens. Since launching, LINK has become one of the most popular cryptocurrencies on the crypto market.

Why Invest in LINK?

Chainlink solves one of the biggest problems that blockchains are experiencing – the inability of smart contracts to tap into information and data sources that live outside of the blockchain (like weather type, stock prices, etc).

To those not well-versed in smart contracts, they are similar to regular contracts in that the terms of agreements between buyers and sellers (or any two parties) are outlined. However, in smart contracts, these terms are written into code. So once the terms are met, the agreement self-executes and transactions are carried out. In this way, intermediary parties are not needed.

As it stands right now, APIs and data help feed smart contracts, but sometimes the data quality and reliability are questionable. Chainlink on the other hand helps to provide reliable external data through its node operators.

The current lack of connectivity between on-chain and off-chain data that exists in the blockchain world today limits the types of smart contracts and applications that can be created. Ultimately, the long-term success of the decentralized finance (DeFi) space is limited by these same limitations. Chainlink has become of the most important players in the data processing field and has attracted the respect of trusted data providers like Brave New Coin, Alpha Vantage and Huobi. These data providers can sell their data to Chainlink, effectively monetizing the data they own.

For many investors, LINK is proving to be valuable in a disjointed crypto world.

Related article: The Pros and Cons of Day Trading vs. Long-Term Crypto Investing

How Do I Securely Store My LINK?

You can buy LINK tokens from crypto trading platforms, like Netcoins, and leave your LINK inside the platform. However, there are much safer options to storing your LINK tokens as leaving them in exchanges can expose them to certain risks like hacking and theft.

The safest option to keeping your LINK tokens secure is to transfer them into a LINK wallet. A LINK wallet is a type of digital wallet that is used to send and receive LINK, similar to a Google wallet or a physical wallet.

There are four different types of LINK wallets: hardware wallets, desktop wallets, mobile wallets and web wallets.

Hardware wallets look like a USB device. They are considered to be offline wallets because they’re not connected to the internet. The fact they’re offline makes them more difficult to find and to hack. As such, they’re typically considered the safest option to store your LINK.

Desktop wallets on the other hand are programs that store your LINK on your computer’s hard drive. Mobile wallets perform the same function as a desktop wallet but on a mobile device instead.

Finally, a web wallet is an online service that sends and stores your LINK on your behalf anywhere, anytime. Similar to checking your email.

Desktop, mobile and web wallets are all connected to the internet (and referred to as “hot wallets”). Like mentioned earlier, they are more susceptible to potential risks. On the other hand, hardware wallets (or “cold wallets”) are considered safer options as they are not connected to the internet.

This is why it’s often advised that Canadians pull out their LINK tokens from crypto trading platforms and send them directly to a hardware wallet. Only in this way, are they in full possession of their LINK tokens and can keep them secure.

Related article: The Importance of Checking What Blockchain the Cryptocurrency You’re Sending Is On

Is LINK a Smart Investment?

Chainlink price experienced growth around mid-2019 to mid-2020. In fact, LINK’s price reached an all-time high of $52.88 on May 9, 2021, as the crypto market rallied with developments also happening in the Chainlink ecosystem.

Some investors are still excited about the future potential of LINK, and believe its price will continue to grow. With new projects and applications emerging on a regular basis, Chainlink will be there to bridge the gap between the on-chain and off-chain world. These, among many other reasons, make LINK a worthwhile bet moving into the future. And if you are a Canadian interested in buying LINK, Netcoins provides a simple and easy way to get started.

This post is for informational purposes only. For proper financial advice, we recommend you speak to a financial advisor.