Chain Link ICO Review – LINK Investment Analysis

https://smartcontract.com/link

ICO Details

Symbol – LINK

WhitepaperLink

Where – The ICO will take place on https://smartcontract.com/link

When – Tuesday, September 19th

How to Participate – LINK tokens can be bought by contributing ETH (Ethereum) tokens

Soft Cap – Unknown

Hard Cap – 32 Million USD

Total Max Market Cap At ICO – 96 Million USD including company allocation/Node Operator allocation

Exchange Rate: Descending time-based structure:

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Total Tokens in Circulation At ICO – 300 Million LINK

(Max tokens in circulation if hard cap is reached is 700 Million split between Node Operators and Contributors)


Overview

Because of how blockchain transactions are recorded and verified by consensus, smart contracts are unable, on their own, to talk to external data feeds. That makes them excellent tools for playing in the Ethereum sandbox but not so useful in the outside world.

What is needed, experts say, are more and better “oracles,” pieces of middleware by which smart contracts can receive, and act on, data from off-chain systems.

Only through oracles can smart contracts provide benefit to banks — or indeed do much more than move digital tokens around. A smart contract behaving like a financial instrument might need to know commodity or equity prices, for instance.

Chain Link is a project aimed at serving as an intermediary information layer in between blockchains. With the advent of Ethereum, it became possible to leverage the power of the blockchain to create binding Smart Contracts that execute code if given conditions are satisfied. A secondary problem arose though – it was difficult to feed actionable, high quality data into Smart Contracts with which to execute their functions.

Contemporary API’s, while useful as an intermediary layer for web applications, mobile phones, and others, are simply insecure when it enters the realm of blockchain. While an API that gives bad data can be simply remedied and transactions reversed with current systems, this won’t be possible with a Smart Contract – if bad data on the price of a stock is given, for example, a Smart Contract could execute the wrong function based on this bad data.

Enter Chain Link, a project which is attempting to solve this “oracle problem” once and for all, by creating cryptographically secure data feeds and facilitating inter-operability in between blockchains. Chain Link currently supports Ethereum and Bitcoin interactions, with more to come in the future (such as Hyperledger) based on future demand.

 


Notable Team Members

Steve Ellis

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Steve Ellis is a graduate of New York University for computer science. He has worked for 3 years at Pivotal Labs, a subsidiary of Dell Technologies as a software engineer. Some of their clients include Citibank, Dish, Hulu, and Mercedes.

 

Ari Juels

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Ari Juels is currently a Professor of  at Cornell Tech in New York City, and Computer Science faculty member at Cornell University. He currently has over 25 thousand citations on scholar.google.com, proving his experience and reliability.

He was the Chief Scientist of RSA, Director of RSA Laboratories, and a Distinguished Engineer at Dell EMC, where he worked until 2013. He received his Ph.D. in computer science from U.C. Berkeley in 1996.


Positives

“Our LINK token allows smart contracts to pay for connectivity to key off-chain resources like data feeds, bank payments, and various other capabilities that smart contracts need to do something valuable,” said Nazarov. “Smart contracts can’t access off-chain resources on their own, and their ability to include data as proof/trigger and bank payments as a way to settle financial agreements, are both critical parts of their usefulness.”

 

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The oracle problem is one of the most difficult aspects of Smart Contract and blockchain technology that has yet to be solved. Chain Link’s parent company Smartcontract not only has provable, production ready linking software that is available for use today, but it also stands out as one of the few projects in this space which is attempting to solve this gargantuan problem. The upside for investors in this kind of project is similar to investing in something like Internet based API’s and intermediary connection systems in the 2000’s – that is to say, massive. To give more specific numbers, over half a billion dollars were invested last year in 2016 alone to API companies or acquisitions. For a project seeking to fund a max of 32 million dollars, there is a gulf of difference between the current buy-in price to get on the ground floor of this project and its full potential.

Chain Link is also already partnered up with big companies such as SWIFT:

We’re proud to be working with SWIFT on their own SWIFT Smart Oracle. Allowing smart contracts on various networks to make payments, send governance instructions, and release collateral with over 11,000 banks.


Negatives

 

As of yet Chain Link has not published a whitepaper, while currently accepting presale donations – even with the kind of team that Chain Link has, and the great product, they are still not enough to overcome this glaring flaw in their marketing and strategy. Chain Link, however, has stated that they will be releasing a whitepaper for their product before the date of the public crowdsale, which will remove some of this author’s concerns regarding the project.

Update: ChainLink has now provided a whitepaper which can be read here:

Whitepaper link

A secondary negative is that the 32 million they are seeking to raise will only surmount to 35% of the total tokens that will be created – this is a very small percentage of the pie in relative terms, however it remains to be seen how the incentive system will work for Node Operators who will receive the other 35%.

 


Conclusion

Chain Link is one of my favorites of 2017, and they are poised to be able to solve the oracle problem once and for all. If successful, as the “API of blockchain”, Chain Link will herald the beginning of true mainstream adoption, as well as the expected heavy usage of their technology means that this is one investment you don’t want to miss out on. Expect big things from Chain Link!

Investment Grade: 90%

4 thoughts on “Chain Link ICO Review – LINK Investment Analysis

  1. Hello, I enjoyed reading through your different posts. They are informative while still being concise. Regarding this particular project, I notice you identified Ari as a team member when he is listed as being an advisor. This is less a critique and more an observation. Their partnership with Cornell was likely cultivated through his efforts and influence, after all.

    After looking into the presale information, it seems that there is a minimum buy in that is a little high for me. That being said, I am still inclined to participate in the public phase.

    Do you think that it is still a wise endeavor to do this? Much of the ‘advice’ I have studied regarding ICOs is that getting into the presale is always the best option and that the public phase is not a smart move.

    Could you compare your experience when participating in a presale phase to the public phase and provide any strategic reasoning as to why the crowdsale would still be worth pursuing with chainlink?

    Thank you again

    Liked by 1 person

    1. Thank you for the encouragement!

      Yes, I don’t really discriminate between team members/advisors, and I’ll even include investors if they’re of particular note. If a well known investor is buying into a project it adds a lot of safety and gives a more bullish outlook for the project itself more often than not.

      The presale for Chain Link is pretty high (likely, as they are not releasing much information on rates or cost of presale tokens), and personally I will be participating in the public sale – while it’s best being in a presale as you get the best prices, public sale participants will still get plenty of ROI from their investments – you can use this later on to leverage your position into presales and get those great rates.

      I’m still buying into ChainLink regardless of whatever presale rates they may have used simply because of the great technology and potential of this project. It could easily balloon from 35 million to 1 billion, and getting in even at ICO prices will be a huge deal.

      Like

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