What is Chainlink?
If you are interested in the latest cryptocurrencies with capabilities that can’t be found elsewhere, then you may want to consider Chainlink. It’s a blockchain project that earned an abundance of attention due to its seemingly unlimited use cases and uniqueness. This cryptocurrency could play an important part in the future of digital assets, not to mention there may be many opportunities to invest in Chainlink with a crypto IRA.
Chainlink is a decentralized blockchain network that acts as a bridge between real-world data and smart contracts on the blockchain. The project’s native cryptocurrency is also called Chainlink, which is consistently one of the top 20 digital currencies based on market capitalization and trades under the symbol LINK.
In addition to serving as an investment whereby you can invest in Chainlink, the cryptocurrency is used as a payment method in the Chainlink ecosystem for payments on the blockchain. The Chainlink network made its debut in the summer of 2017 followed by the launch of the LINK cryptocurrency soon afterward.
Given Chainlink’s role as the “link” between real-world and blockchain data, the rewards system greatly differs from the Bitcoin and Ethereum networks. Chainlink node operators accept jobs as well as gather and deliver off-chain data to smart contracts, in exchange for which they earn LINK coins. In this system, the size of the reward is set by the contract originator and is commensurate with the extent of the job.
The onset of Chainlink 2.0 is designed to introduce explicit staking to the network, which is also different than what the cryptocurrency community has come to know as staking. Rather than a “set it and forget it” approach, staking with Chainlink 2.0 will involve having the nodes deposit LINK as collateral before taking certain jobs. If the terms of the contract aren’t met, the node could lose the collateral. Chainlink 2.0 is currently in the works.
The Basics of Chainlink
Chainlink was an early mover in the blockchain space, and its importance has only increased since then, especially due to its utilization of oracles. This is software that automatically translates data to smart contracts. Oracles are getting more popular as the number of use cases increases across decentralized finance (DeFi), insurance, gaming, and non-fungible tokens (NFTs).
It’s still early innings for this blockchain project, which allows investors to buy Chainlink tokens before the network becomes more mature and there is potentially even greater adoption of the technology. The more bullish you are that blockchain adoption may increase over time, the more important Chainlink may be for you. This is also another reason why you might want to consider investing in Chainlink for the long term and capitalize on its potential growth based on its technology.
Further evidence of the importance of Chainlink can be found in the cryptocurrency’s price. While Chainlink price predictions can be like peering into a crystal ball, LINK has gone from hovering below $1 in April of 2019 to more than $53 in May of 2021. If you want to buy Chainlink, as the project grows, demand for the LINK token could increase. To capture potential long-term gains, you might consider adding Chainlink to your IRA.
Key Concepts of Chainlink
Chainlink has several key features that make the network tick. It helps to understand that blockchains are trustless networks. In other words, they manage to slash the amount of trust that is required to run an honest system because there is no need for third-party intervention.
This is especially useful when it comes to contracts, or as they are known in the decentralized world, smart contracts. These smart contracts are still between two parties, but they are automatically executed once terms are met rather than using human intervention where one entity can have a leg up over another. Let’s explore some of Chainlink’s key features which could make it a great investment within a cryptocurrency IRA:
- Oracle technology is what allows Chainlink to engage with non-blockchain data and bring that information to smart contracts on the blockchain. Chainlink’s oracle tech is being used by hundreds of projects as of May 2021. Oracles are important because they allow for the merging of on-chain (industry lingo for on the blockchain) data with off-chain, or off-the-blockchain data. Given the nascent nature of the decentralized world, this is still necessary as there is plenty of data that has not made its way onto the blockchain as of yet.
- Hybrid smart contracts are applications that take the on-chain code and combine it with off-chain data via decentralized oracle networks. They offer the best of both worlds, merging the immutable nature of blockchain technology with new sources of data via oracles safely and securely, all the while boasting features such as “scalability, confidentiality, order fairness, and connectivity.”
- DeFi is a burgeoning niche in the cryptocurrency space in which traditional financial services are being disrupted with decentralized products and services. Chainlink has been a key beneficiary of this trend as demand for real-world data that its oracles capture increases. What is happening is DeFi projects are increasingly turning to Chainlink to join off-chain data such as fiat or commodity prices with smart contracts on the blockchain. This trend could make the case for buying Chainlink more compelling, though cryptocurrency prices can be volatile and are impossible to predict consistently and accurately.
Chainlink vs. Bitcoin and Ethereum
While blockchain technology is gaining popularity, many networks tend to exist in a vacuum in that they typically can’t access outside data, unlike Chainlink. Bitcoin as the maiden blockchain can only access a limited amount of off-chain data, while Ethereum expounded upon that notion through the use of smart contracts. These limitations are a feature and a bug, as they make for more secure networks but also prevent these blockchains from accessing real-world data that could bolster their capabilities.
Enter oracles like Chainlink, which can capture outside data (think stock prices, sports game scores, athlete stats, weather, and more) and through smart contracts bring it to the blockchain while keeping the decentralized nature of the network intact. And the great thing about Chainlink is even though it was built on the Ethereum network, it is compatible with other blockchains as well.
How to Invest in Chainlink in an IRA
If you believe in the capabilities of Chainlink and you want to potentially grow your wealth with it, then you may want to know how to invest in Chainlink. Our cryptocurrency retirement platform makes it easy to gain exposure to LINK for the long term. Just follow these three steps and you will be on your way to owning Chainlink in your IRA:
- Create an account in less than three minutes. Once you’ve done so, you can access your tailored dashboard and digital wallet.
- Transfer funds. You can either rollover your existing retirement account or fund your crypto IRA with money from your bank.
- Start trading cryptocurrencies. You can buy, sell, and swap cryptocurrencies and even digital gold 24/7 in real–time as soon as your account is funded.
Chainlink IRAs and Taxes?
If you’re investing in assets like cryptocurrencies, then understanding taxes should be important to you. As of now, long-term capital gains taxes can be as high as 20%. That amount could quickly balloon up to nearly 40% under President Biden’s capital gains tax rate, the American Families Plan.
By investing in a Chainlink Roth IRA on our platform, you can achieve tax-advantaged growth and keep more of your money. You can invest in other cryptocurrencies beyond Chainlink as well, including Bitcoin, Ethereum, Litecoin, and more. In fact, those with IRAs pay no capital gains as long as they wait to withdraw their funds until after age 59 and a half.
Chainlink Price Predictions
While the cryptocurrency markets are unpredictable and there are no guarantees, there is no shortage of Chainlink price predictions:
- CoinPedia predicts the LINK price could reach $80-100 by the end of 2021.
- Digitalcoin has a long-term price prediction for LINK of $105.83.
- Wallet Investor has a one-year price forecast on Chainlink of $56.39.
Why should I Invest in Chainlink with Bitcoin IRA?
We’ve outlined compelling reasons why you might want to buy Chainlink, largely due to its powerful network and vast capabilities. But there are more reasons than its technology. Chainlink’s price skyrocketed up from $1.80 in January of 2020 up to $52 in May of 2021. If history repeats itself, it could go up even more. There are equally good reasons to invest in Cardano within a cryptocurrency IRA through our state-of-the-art platform. For example, our platform was the first to allow investors to buy cryptocurrencies like Chainlink in their retirement accounts.
Since launching, our platform has been used by more than 100,000 users who can easily trade cryptocurrencies around the clock. We’ve also earned more than 2,500 5-star reviews from happy users. Another major reason investors create cryptocurrency retirement accounts with us is that they can earn up to 6%* interest with IRA Earn, where you let your retirement work for you with monthly interest distributions.
Cryptocurrencies on our platform are stored in multi-signature cold storage provided by BitGo, one of the leaders in cryptocurrency protection industry. BitGo’s world-class security and storage also provides our users with $100 million in custody insurance.
How to Buy Chainlink in an IRA Today
With highly positive price expectations, the potential for the crypto to be used by major institutions, and a strong history of growth, you may want to consider investing in Chainlink within an IRA. The first step is to create an account. The second step is to fund your account via a rollover from your existing retirement account or transfer money from your bank. And the final step is to start trading!
*Interest rates may vary.