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Learn Where & How to Buy Chainlink (LINK) - A Beginner's Guide

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Chainlink (LINK)
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Chainlink launched its ICO in September 2017, and not much was heard about it till early in 2020 when DeFi markets had an upswing. The ecosystem has a native token called LINK, which is used to incentivise the operators of nodes on the network. Chainlink makes it possible for real-world data to be monetised and for smart contracts to interface with users, systems and other interests. Its relevance is seen in revolutionising how the global financial landscape operates using the acclaimed decentralised oracle networks.

Chainlink (LINK) shot its way to the top 5 cryptocurrencies by market capitalisation this year in a move that shows the dynamism of blockchain utility and its ever-expanding boundaries. With the rapid progress, it has made this year, LINK has sparked the interest of crypto traders as a digital asset with growth potential as it has taken a prominent role in facilitating the DeFi boom. Users can buy Chainlink on many cryptocurrency exchanges either directly through fiat currencies such as the US dollar or through other cryptocurrencies. 

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3 Things to Consider Before Buying Chainlink

1

Future Potential

Chainlink has 25 oracle networks so far on the Ethereum network, making it the most resourced blockchain available today. With smart contract functionality currently in high demand around the world, Chainlink has successfully integrated with leading DeFi brands as well as IT behemoths like IBM and Microsoft. With its DeFi functionality, Chainlink is giving traditional banks a run for their money. There is a reason to believe that LINK is a viable project as AI and ML innovations will shape the future of our world. Chainlink connects blockchain and smart contracts to the real-world using oracles, web APIs and payment systems to enhance and provide seamless processes.

2

Supply/Availability

Chainlink was developed by Sergev Nazarov and Steve Ellis, and the initial tokens were released through its maiden ICO in September 2017. There are a total of 1,000,000,000 LINK in fixed supply with just 391,509,556 currently in circulation. 32% got allocated to node operators while 35% is allocated for network development.

3

Loyal & Dedicated Community

Chainlink has a community of node operators, investors and collaborators. The network operates a system of reputation priority which makes node operators sit up and avoid loss of rewards. The network of oracles accesses data feeds and uses online processes to validate the harvested data. With a dual on-chain and off-chain component to the network, collaborations lie at the heart of the success of Chainlink.

Our Tutorial to Buy Chainlink in 5 Steps

For every investor, finding a reliable broker or an exchange will be the first step in the crypto investment journey. While some people may prefer cryptocurrency investment from peer-to-peer (P2P) platforms, interfacing with a broker or exchange will happen at some point. The necessary steps when buying LINK are explained below:

Step 1: Find an Appropriate Platform to Buy Chainlink

How appropriate is a platform to buy Chainlink will depend on the user’s circumstances and priorities. With Chainlink price presently stable and surging, the speed of transaction could be a determining factor to consider. Another investor might want to be sure about the transaction cost and look to compare the fee structure on each platform.

A regular trader might be more interested in the trading tools offered by a platform.  Is there a stop-loss or stop-limit feature available and functional? No active trader can do without excellent trading tools, and their absence could be a deal-breaker when choosing a trading platform. Bitmex and Binance are known for these functionalities. Platforms like Coinmama, eToro and Pepperstone are also available to trade LINK.

While LINK futures are now available to trade, it requires a better understanding of high-pitch techniques since the risk of loss and profitability are magnified. Binance and Bitmex currently offer LINK futures.

Step 2: Registration / Create a New Account

When creating a new account, the investor needs to provide a functional email address, choose a password, and provide a means of identification. A national ID card, international passport and driver’s license are some of the acceptable documents required by an exchange. Authenticating a new account is completed almost immediately in some trading platforms and within 24 hours for others.

Just in case you consider KYC guidelines as irritating, you need to consider that regulation helps to protect the investor and minimise exposure to risk. Regulated platforms have to ensure adherence to set laws in their operating jurisdictions. Unregulated platforms could bend rules, but they could also leave you high and dry due to poor management and lack of professionalism.

Step 3: Deposit Funds

You can deposit fiat in most of the trading platforms to fund your account. While some require deposit minimums and upper limits, others set no lower limits for deposits. On Binance exchange, the minimum amount you can deposit is not restricted but the upper limits are regulated. You can deposit a minimum of $50 when using eToro and Coinmama, but you need to raise it to $500 when using a bank transfer. 

Payment using a credit card, bank deposit, cryptocurrencies or PayPal are commonly used across trading platforms. When your deposit is completed, you will be notified, and you can then proceed to the next stage.

Step 4: Start Trading or Buying Chainlink

Before you start trading LINK, you need to be sure that you have a ready wallet for its storage. While exchanges provide free wallets, if you are not actively trading, a hardware wallet will be necessary for safekeeping of your digital asset. As you trade LINK, make sure that you understand trading tools that are useful for risk management. This is vital to minimise losses.

While brokers provide similar services to what you find on exchanges, they do also give the investor a chance to buy futures and CFDs, which most exchanges do not offer. Some traders want direct control of their trades and this explains their preference for exchanges. On eToro, however, you can choose your trade directly, and be in control of your choices.

You can also trade LINK using margins, futures or CFDs. You are using margin trading when you take a position bigger than your trading capital by accessing credit from your exchange or broker. Where CFDs are available, you go into a contract with the broker stating an expected future price, for which you will be paid for the difference between the spot price and your contract price. You will pay the broker the difference in the contract if your anticipated spot price at maturity fails to materialise. For futures, the trades are standardised and are often at higher amounts, but again, you are betting on the performance of LINK within a specified period. Binance, Bitmex, Pepperstone and eToro are the leading platforms for these trades. 

Step 5: Optional Steps

As a LINK trader, you should also consider the additional steps provided here:

  • LINK Staking

Some exchanges support staking for ERC 20 tokens and you can deposit your LINK and earn additional tokens in return. This is a passive income that does not come with a risk of token loss.

  • Buy LINK at a low price and sell high

Every cryptocurrency could experience a price drop at any time. However, the price rise is also likely to occur with little or no delays. When LINK price drops, it is a good time to buy, and selling will be recommended as the price surges again. Your profit will always be the difference between the rise in price and the purchase cost. 

Available Payment Methods for Buying Chainlink

The payment method you can use when buying LINK depends on what the platform accepts and what payment options are available in your location. These are the options commonly available:

  • Buy Chainlink with Cash

To buy Chainlink with cash, there must be someone offering LINK directly to you for this to happen as in a P2P arrangement. In the alternative, a platform that allows bank deposits could also make this possible. 

  • Buy Chainlink with Credit / Debit Card

This payment system is most popular around the world and easily the most convenient. It also attracts higher fees as well.

  • Buy Chainlink with Bank Transfer

Bank transfers can be fast within national boundaries, when done across borders, they become wire transfers that can take effect within 48 hours. This will be okay when you are not in a hurry.

  • Buy Chainlink with Cryptocurrency

Blockchain-based payments such as buying LINK with Bitcoin, Ethereum or Ripple are normally faster when there is no congestion on the network. This also attracts lower fees in most cases.

  • Buy Chainlink with PayPal

To buy LINK with PayPal is cheaper but not always widely available. Most traders can only use this payment system in North America and Europe.

What Are the Fees for Buying Chainlink?

Exchanges and brokers charge transaction fees as an important means to fund their business operations. While the fees charged might vary from one platform to another, they play a vital role in keeping the trade facilitators afloat. One way to minimise your fees is to use low-tariff platforms such as Binance for large transactions. Coinmama also has a low fee structure.

When making a one-off small LINK purchase, investors hardly bother about the fees as this will be rather minute. For regular traders, using low tariff platforms can save you a lot of money in the long run. Transaction fees would cover network fees incurred to move tokens into your LINK wallet from the seller as well as fees arising from the deposit method you use. In some cases, exchanges also charge a maintenance fee for using wallet services or for inactive accounts. 

Expert Tip to Buy and Sell Chainlink

Cryptocurrency traders are susceptible to the FOMO and FUD that often rules the market. Some people tend to reflect a lot on a missed opportunity to earn more profits and this can cast a spell over their trades for many days. While people rue over missed openings for-profits, other opportunities show up in the meantime that they cannot see. It is always better to not sulk over a chance to earn more, instead sit up and wait for the next opening to show up. Read more of the financial press and follow crypto influencers that you can learn more trading tips from and pick possible hints to make more money. In all these, never forget to always apply risk management tips.

How to Find the Best Time to Buy Chainlink

The best time to act is today according to a common soundbite. The crypto market is volatile, and prices move up and down regularly. What you can do is to take note of market sentiments and know when the odds favour buying and when to sell high.

If you also keep an eye on market trends, you can spot patterns that tend to be repeated across markets. If you succeed in studying market behaviour and taking appropriate notes, you can tell the trend when it shows up and be in a position for more profitable trades.

What Drives the Coin’s Price?

Chainlink acts in accordance with Bitcoin at certain times and can be divergent at other seasons. As a cryptocurrency, the general market sentiment weighs in on the LINK market price. However, you need to also know that there are specific situations like the long-drawn price drop early in 2020, which drove investors to explore more of DeFi, leading to the surge in LINK price that peaked at $19.85. In summary, the forces of demand and supply are vital in determining the LINK price.

You can earn some additional income by staking LINK for a reward. Staking is effectively depositing your crypto to a platform in order to earn some interest income. Your income will be paid in LINK tokens at specified intervals or at end of the staking period.

How to Sell Chainlink

There is no rigid manner to sell LINK, and the option to explore boils down to the seller’s peculiar circumstances. Largely, most crypto sellers make use of brokers and exchanges, while others use P2P avenues. A broker is trusted in many countries and you can get your sales proceeds within 24 hours or more after the sales get completed. If you use an exchange, you can sell your LINK almost immediately if you sell at market price. You can then withdraw your proceeds in the manner you prefer.

For CFDs, a sale is not the best description, as the contract ends when the period stated elapses. You are paid your contract proceeds when the contract matures or you have to pay the broker if the spot price you stated did not materialise.

Frequently asked questions

  1. No. It was launched in 2017 and only made the headlines in 2020 after the DeFi boom drove up its price.

  2. Yes. Chainlink is a Top 10 crypto and that means that demand for it is high around the world.

  3. Yes. Chainlink has signed agreements with Microsoft and IBM to foster system integration. This shows its growing market reach and value recognition.

  4. Yes. Chainlink as a cryptocurrency experiences price volatility and in-between the surge and dips lie a room to make some profitable trades.

  5. No. Chainlink is easily traded in almost all countries and presently has no restriction in America.

  6. Yes. Some exchanges allow you to stake LINK to earn interest or another crypto at periodic intervals.

  7. The price of LINK goes up when more people buy it than normal. Also, other general market sentiments and sectoral breaking news could impact it.

  8. The project has high ratings at present and the future seems to promise better adoption levels. However, the cryptocurrency market is highly volatile and it is important to do your own research.

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