This guide delves into how to buy the Chainlink (LINK) token, one of the most popular Ethereum-based ERC-20 digital assets. Specifically, it will outline some of the features of LINK, why the token is appealing to investors, where it can be bought, and a step-by-step process to buying it on a credible and trustworthy platform.
What is Chainlink?
Introduced in September 2017, Chainlink was designed to bridge the gap between smart contracts and offline data sources. Essentially, the project is meant to bring offline data such as price feeds, weather information, event outcomes, etc., onto the blockchain.
To achieve this purpose, Chainlink uses a network of decentralized oracles (DON) that source for accurate data, sort it to exclude inconsistencies, then serve the end results to the requester. All this is done using smart contracts, which are programmable automatically executable pieces of code existing on a decentralized network such as a blockchain.
The native digital asset on this Chainlink network is called LINK, an ERC-20 token with added ERC-223 functionality enabling it to serve as a value transfer asset across the Chainlink ecosystem. As a utility token, LINK serves several purposes, including:
- Payment of node operator fees. This was the only usage envisioned by the Chainlink team at the time of publishing the first version of the project whitepaper;
- Staking as an incentive for good behavior. Introduced in the revised version 2.0 of the Chainlink whitepaper to accommodate the increased utility of the network.
Recommended video: What is Chainlink?
Why invest in Chainlink (LINK)?
One of the primary motivations for investing in blockchain tokens is the desire for an increased return on your initial investment; however, there are other reasons, such as the desire to help a specific blockchain network by participating in governance choices and promoting the network’s development. There are three main reasons to invest in Chainlink:
- Staking – unlike most other staking networks, Chainlink applies the staking concept a little differently. Instead of allowing stakeholders to earn passive income, the network uses staking as a way for node operators to have a ‘skin-in-the-game,’ thereby incentivizing good behavior. If you intend to participate in the Chainlink ecosystem as a node operator, you will have to acquire LINK tokens for staking;
- Fee payment – this reason mostly applies to developers whose smart contracts will need to access offline data through the Chainlink DONs. Their decentralized apps will need to make payment for the DON services using LINK;
- Speculation – most LINK investors will only find value in the token by trading it or buying and ‘hodling‘ for the long term, and Chainlink is among projects that have seen explosive growth over the last five years, which could indicate the potential for further growth going forward.
Where to buy Chainlink’s LINK tokens
Being a popular digital asset, the LINK token is easy to find in any of the leading crypto trading platforms. If you are beginning out your crypto investment journey, you have to choose a preferred trading platform, and there are two types of these platforms from which to choose:
- Centralized exchanges (CEX) – run and operated by a single entity, organization, or individual;
- Decentralized exchanges (DEX) – operated by diverse entities such as individuals within a group or community, ensuring that a collective majority makes governance decisions.
The advantage of using a centralized exchange over a decentralized one is that:
- They often adhere to regulations;
- Typically they offer customer support;
- CEX platforms tend to have a more user-friendly interface;
- Some have companion mobile apps enabling users to access services on the go;
The main drawbacks of centralized exchanges are:
- Since they have to adhere to regulations, they tend to have limited coverage for both assets and geolocation;
- They are less secure given that they operate by using centralized data servers for customer information and funds;
Decentralized exchanges have a leg up over their centralized counterparts in both of the above-stated points. Since DEXes are not regulated, they can be accessed by anyone. Additionally, since users have to take custody of their assets, there is less of an incentive for malicious individuals to attack DEX users.
However, given the ease of use for more CEX platforms, they present a good compromise, especially for beginners to cryptocurrency investment.
In the next section, we will highlight how to buy Chainlink (LINK) tokens using a CEX platform, and our pick for this tutorial is Uphold, a fully regulated and highly secure multi-asset brokerage platform. The exchange supports several national currencies, precious metals such as silver and gold, US-based equities, and more than 80 cryptocurrencies, including Chainlink.
How to buy Chainlink on Uphold (step-by-step)
For this section, you will need a fully verified Uphold account; therefore, if you are yet to create one, here’s how to do that.
Visit Uphold.com and click on the Sign-Up button as shown below.
On the sign-up page, provide the requested KYC (know your customer) details, including your name, email address, country of residence, etc. For a detailed tutorial on how to create an account with Uphold, check out the sign-up section of our comprehensive Uphold review.
Once you complete the sign-up process, log in to your Uphold account. To do that, head over to the Uphold homepage and click on the Log In link as shown below.
Provide your email address and password that you set up in the sign-up stage.
Explore the Uphold interface.
When you log in to your Uphold account, you will notice three columns. The first one shows you the recent activity or trades you initiated within your account and a list of assets that you are watching.
The second column contains your portfolio, which represents the assets you hold within your account. This section also shows you a graphical representation of the value of your portfolio so you can tell its performance by a simple glance.
The final column, which will be of great interest to us, is the transaction column. All trades will be initiated from this last column, including purchases, sales, and exchanges between assets. The column is labeled ‘Anything to Anything,’ signifying that Uphold allows its users to trade between any of the supported assets. For example, a user can exchange their gold for Bitcoin or their COIN (Coinbase) stock for LINK tokens.
Within the transaction column, there are three tabs through which to set up a trade:
- Transact – with this tab, a user can set up a spot trade where the transaction is executed immediately;
- Repeat – here, the user can set up a recurring transaction which the system executes at regular intervals automatically;
- Limit – the last option allows a user to set up a transaction that gets executed once the desired asset price is achieved.
Let’s go through each of these three tabs to understand how you can buy LINK tokens using any of the available trade setups.
How to buy Chainlink (LINK) on the spot using Uphold
Step 1 – Provide a payment method.
The transact tab has below it three form fields where you specify the payment method or the asset from which you want to exchange. The middle field is optional but included for convenience, where a user can specify the equivalent amount of the asset they wish to trade in fiat currency.
The last section is used to specify which asset they want to buy or trade into.
Click on the [From] field to select a payment method or the asset from which you want to trade.
If this is the first time using Uphold, you need to add a payment method that will be linked to your account for this and any future trades. You can also opt to transfer cryptocurrency from an external wallet to Uphold. That is an option, but to keep this guide simple and straightforward, we will use either a bank transfer or a debit card.
In the pop-up screen, click on either [+] symbols next to ‘Banks’ or ‘Debit cards’ titles, depending on which option you want to use.
If you choose the bank deposit method, you will need to select the default currency of your transfer amongst USD, GBP, or EUR.
Then you will select whether you are linking your bank account or making a one-time wire transfer. The former is immediate, and the LINK tokens you purchase will be deposited into your Uphold account instantly, while the latter takes a few business days to settle.
Note that the wire transfer option is ideal for making larger fund transfers with zero transaction fees for transfers above $5,000.
Next, Uphold will display its bank account details to which you will be required to send the funds.
Once you copy the details, click [Done] to revert back to the starting page.
Alternatively, you can opt to use a debit card. If that’s the case, the process of adding a payment card is more straightforward. Once you click on the [+] symbol, you will be presented with a pop-up card addition form where you will fill in your card details.
Note: You can also select the default currency that your card supports to avoid payment delays and inconveniences.
Click the [Add card] button after providing all the necessary details. Notice that the card name is not included in the form fields because the platform only allows the addition of debit cards owned by the Uphold account holder. It is assumed that the names will match.
Step 2 – Choose the asset to buy.
Next, proceed to select LINK as the asset that you want to purchase by clicking on the [To] field. Use the search feature or scroll down to the cryptocurrencies section to locate the Chainlink (LINK) option.
Once you select it, you will be reverted back to the initial start screen to provide the value of your purchase. If you are using the bank transfer method, you probably already have specified how much money you are depositing into your account.
If, however, you are using any other method such as a debit card or exchanging from one asset into LINK, you need to specify the amount of token to receive.
Step 3 – Preview and confirm the transaction.
The final step is to confirm that the details of the transaction are correct. Click the [Preview] button, which will load the confirmation screen. Here, check to see whether the payment method and details are correct, the amount of money you wish to spend, and the exchange rate.
Click [Confirm] to authorize the transaction. The trade will be executed instantly if you use any other method except a wire transfer which only executes once the funds have been received by Uphold. You can confirm that the transaction is successful by checking the portfolio column.
How to Buy Chainlink (LINK) Using the Repeat Feature on Uphold
The repeat feature enables Uphold users to set up automatically executed trades at regular intervals for a predetermined amount of time. This could be daily, weekly, or even monthly. Repeat trades have two main advantages:
- They are executed automatically;
- Recurring purchases help an investor average into a position.
To set up a recurring LINK purchase on Uphold, follow the steps below.
Step 1 – Activate Repeat on Uphold.
The repeat feature is not active by default. The user needs to set it up manually before it can be executed automatically going forward. To do this, click on the second tab of the transaction column labeled [Repeat].
You’ll notice that the form now includes an extra panel below the normal spot transaction form. You can follow the same procedure we outlined in the previous section on how to make a spot purchase for LINK tokens on Uphold. Fill in your payment method and specify the asset you want to purchase on repeat the same way you would set up a normal trade.
Then to activate Repeat, click on the [Repeats] tab select any of the available options of the frequency of your trades.
Step 2 – Complete the Repeat Buy Set Up
Once you choose the frequency, you can then specify the start and end dates. You can choose a precise end date by using the calendar provided, as shown below.
Alternatively, you can specify how many times you want the repeat trade to recur by using the [Occurrences] tab, and the system will automatically calculate the end date. Use the [–] and [+] toggles to increase or reduce the repeat occurrences.
Optionally, you can include a label for your repeat trade to help identify them on your order history. At this point, you have successfully set up a recurring trade. Click [Preview] to confirm the transaction.
Note: The repeat feature can only be used in conjunction with the debit card payment method and the card needs to be funded for every recurring purchase to be executed.
How to Buy Chainlink (LINK) Using the Limit Feature on Uphold
Setting up a limit order to buy LINK tokens on Uphold is a simple and straightforward process. The feature enables the user to set up a target price on which a trade will be executed. If the asset price is not achieved, the order should be canceled, either manually or automatically, depending on the settings.
First, select the [Limit] tab.
In the trade form, you will notice a little change to the middle form tab with the fiat symbol. Here there is a green lock symbol instead of the ‘equivalent double tilde’ sign we have seen on the previous trade setups.
The significance of this change is that since you are specifying an exact buying price, you must fill in both the middle and the bottom fields. In the middle tab, fill in the amount of fiat currency you are willing to spend, and in the [To] field, specify how many LINK tokens you want to buy for that amount.
Below that, you need to specify the validity of the trade. There are two ways in which a limit order is completed: successful trade or canceled. If the target price is reached, the trade is completed successfully. However, if the target price is not reached in a certain timeline, the trader has the option to cancel the trade manually or set up an automatic trigger to cancel it.
The cancel mechanism is set to be manually executed by default, but if you wish to use the automatic option, click on the [Duration] tab and make a selection from the drop-down menu provided.
‘Good ‘til canceled’ means that the limit order will remain open until the user manually cancels it. The second option is rather straightforward, where the system automatically cancels the order at midnight on the same day.
‘Good ‘til date’ allows the user to set up a validity duration that expires on a specific date.
Once done, preview the order and confirm it. This transaction will remain pending on your order history, and once it’s executed, the LINK tokens will promptly reflect on your portfolio column.
Chainlink (LINK) is an innovative blockchain project with huge potential not just within the crypto space but also as a speculative asset for investors. This guide has delved into a brief into the project and shown you a step-by-step process to acquiring LINK tokens using the fully regulated and highly secure Uphold platform.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative and digital assets are highly volatile. Your capital is at risk when investing, so only invest what you are willing to lose.
FAQs on Chainlink (LINK)
What is Chainlink?
Chainlink is a network of decentralized oracles helping bridge the gap between smart contracts and offline data sources. The network is designed to onboard data to the blockchain, including price feeds, weather information, and event outcomes.
What are LINK tokens used for?
LINK is a utility token based on the popular ERC-20 standard used as a native currency on the Chainlink network. It has two uses:
- Payment for node operators;
- Staking mechanism to incentivize acceptable behavior from node operators.
Where can I buy Chainlink (LINK) tokens?
LINK is among the more popular cryptocurrencies and coupled with the fact that it is an Ethereum-based token, it is supported by a majority of digital asset trading platforms, both centralized and decentralized. In this tutorial, we have used Uphold for demonstration purposes. It is a fully regulated and highly secure multi-asset brokerage platform.
Is Chainklink a good investment in 2022?
To determine whether any given digital asset is a good investment to include within a portfolio, you have to consider several subjective factors, including your investment goals, timing, and investing style.