In recent years, the cryptocurrency market has exploded.Currently there are over 8,620 Cryptocurrency, According to CoinMarketCap.com, new tokens seem to exist every day. More importantly, the total value of the cryptocurrency market has skyrocketed by over 1,000% over the past two years to reach $ 2.25 trillion. Other asset classes are not generating revenue close to that number.
Of course, cryptocurrencies are incredibly volatile and past performance does not guarantee future returns. But if you are a risk-tolerant investor who has plenty of time to retire, it makes sense to add a small cryptocurrency position (probably 5%) to your portfolio. With that in mind, Bitcoin ((((CRYPTO: BTC). When Chain link ((((CRYPTO: LINK). Looks like a smart long-term investment.
This is the reason.
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1. Bitcoin
Bitcoin is built on blockchain technology, a database that resides across a distributed network of nodes (or computers). And that database is protected by encryption. That is, the miner (not the bank) is responsible for verifying the transaction and preventing fraud.In other words, Bitcoin To do Allows you to spend money electronically without the help of financial institutions. However, the network is too slow to make Bitcoin a viable alternative to existing payment infrastructure.
However, the Bitcoin source code limits its supply to 21 million tokens. This is a quality comparable to other finite assets. In fact, Bitcoin is often referred to as digital gold. And if supply is kept constant, economic principles suggest that increased demand leads to higher prices. So this is the question: will the demand for Bitcoin continue to grow? I think the answer is yes.
Since its debut in 2009, Bitcoin has reached a market value of approximately $ 900 billion, demonstrating its popularity among investors. I’m not just talking about retailers. According to a recent Fidelity survey released in September, more institutions are investing in digital assets, and that trend will continue. A good example: 71% of the surveyed people plan to buy digital assets in the future, but currently only 52% own digital assets.
More importantly, Bitcoin is the most widely held digital asset among institutional investors. Assuming that pattern holds, the price of Bitcoin should rise as more institutions adopt cryptocurrencies as part of their investment strategy.
2. Chain link
Cryptocurrency projects like avalanche When Solana Contributes to Evolution of blockchain technology, Create use cases that go beyond simple payment systems. Specifically, Avalanche and Solana are programmable blockchains. This means developers can build self-contained computer programs (or smart contracts) on both networks. And Chainlink was designed to make smart contracts more convenient.
In general, blockchains cannot interact with real systems. That is, the blockchain is not familiar with the data that others depend on.Smart contract Decentralized finance (DeFi) Product. Also, by eliminating intermediaries, DeFi promises to make financial services cheaper and more accessible. However, these products are not very useful without actual data.
For example, imagine a DeFi marketplace that sells artwork, real estate, or other collectibles. The underlying smart contract needs to know the latest market value of these assets. You may be wondering: why don’t you ask someone to manually insert the price? This is a good idea, but allowing one person to set the price undermines the decentralized nature of smart contracts and creates a single point of failure. Chainlink solves that problem.
Chainlink is a so-called Oracle decentralized network that uses LINK tokens. Oracle is an entity (such as an application programming interface) that can bring real-world data into any blockchain. Similarly, Oracle node operators (that is, those who run the network infrastructure) must join or pledge to join LINK. They are paid LINK for their services.
Going back to the previous example, suppose you want to buy real estate. The smart contract requests price data from Chainlink, then the node operator bids on the job, and the Chainlink protocol selects the operator to meet the request. In this case, the operator collects data from the real estate appraiser and each sends the data to the chainlink. The important parts are: Multiple data points are coordinated for accurate results while maintaining the decentralized nature of the network.
What is your investment dissertation? Chainlink is the largest and most popular Acle network. The demand for Chainlink Oracle should increase as smarter contracts are designed to integrate real-world data. Also, as these oracles are paid in LINK, the demand for LINK tokens should increase and the price should rise. Like Bitcoin, the supply of LINK is fixed, but in this case the limit is 1 billion tokens.More importantly, Chainlink is interoperable Any Blockchain. That is, its long-term growth prospects have nothing to do with the success of a single network. So Chainlink looks like a smart purchase.
This article represents the opinion of a writer who may disagree with the “official” recommendation position of the Motley Fool Premium Advisory Service. We are miscellaneous! Asking investment papers (even our own) helps us all think critically about investment and make decisions that help us become smarter, happier, and richer. It will help.
