Chainlink is a decentralised blockchain middleware and cryptocurrency designed to bridge the gap between smart contracts and external data sources. Investors looking for newer or less well-known coins should keep their eye on Chainlink (LINK). This guide will show you how to buy and trade Chainlink in 2020.
Where to buy Chainlink
Read on to find out about Chainlink and how it works or jump ahead to our step-by-step buyers guide if you’re ready to start investing.
What is Chainlink?
The Chainlink platform was designed to improve the way we use smart contracts to ensure they remain private and secure. LINK tokens are used to pay the Node Operators in the network that perform the necessary computational tasks to facilitate smart contract transactions.
How does Chainlink work?
The main issue with smart contracts is that they can’t interact with external APIs or traditional banking systems without using a centralised, third-party solution. So, to solve the issue, the Chainlink team created the decentralised Chainlink platform that seamlessly integrates with those external data sources.
LINK tokens are used as payment within the Chainlink ecosystem. So, in theory, the more popular the Chainlink platform becomes, the more interesting its LINK cryptocurrency will seem to investors.
How to buy LINK online – step-by-step guide
Step 1. Get a suitable wallet
There are loads of LINK-compatible wallets to choose from, so we’ve listed our top three to narrow down your search:
- Ledger Nano X: One of the safest options for storing your LINK tokens is the Nano X hardware wallet from Ledger. It’s not the cheapest wallet out there, but if you’re serious about security, it’s one of the best.
- MyEtherWallet: If you’re not looking to spend money on a wallet, web-based MyEtherWallet (MEW) is a great option.
- Coinbase Wallet: If you need a mobile storage solution, check out the Coinbase wallet. It’s compatible with both Android and iOS and available as a download from Google Play and the App Store.
Step 2. Find a Chainlink exchange
The next step to securing those LINK funds is to find an exchange. There are plenty to choose from, so to narrow your search and save you some time, we’ve picked out a couple of our favourite places to buy Chainlink:
- Changelly: If you’re looking a quick and easy way to buy Chainlink, then head on over to Changelly for some of the best prices and one of the most user-friendly interfaces around.
- Binance: We also recommend Binance, the world’s biggest crypto exchange. But, while it offers a huge crypto marketplace with competitive fees, you won’t be able to buy using Fiat currency, so you’ll have to acquire Bitcoin or Ethereum in order to exchange it for LINK.
Step 3. Withdraw your Chainlink
It’s a good idea to withdraw your Chainlink funds from the exchange as soon as you’ve acquired them – it’s much safer to keep cryptocurrencies in a digital wallet than on an exchange.
How to trade Chainlink – step-by-step guide
If you’re only interested in trading rather than buying and owning Chainlink, then there’s no need to set up a wallet as you’ll simply be predicting whether the price of LINK will go up or down.
Step 1. Find a broker
Finding a broker is easy if you know where to find them and what you’re after. However, it’s well worth having a look around and doing some research before you commit to one as they all offer different perks and levels of support.
We tend to go for more established brokers such as Plus500 or eToro as they have been around for a while and are easy to get to grips with.
Step 2. Deposit money
Once you’ve chosen a broker, you’ll need to put some cash down as a deposit. The process is fairly straightforward and minimum deposit requirements are usually pretty low, so you can start with a relatively small bankroll.
Step 3. Decide how you’d like to trade
There are two main ways to trade cryptocurrencies: spread betting or CFDs (contracts for difference). While there are some differences, both methods require you to take a position on whether you think the price of your chosen cryptocurrency will rise or fall over a set period of time. If you’re just starting out, it might be worth doing some research on spreads and CFDs before you jump in.
Step 4. Start trading
Once you’ve put down a deposit, you’ll no doubt be raring to go, but we recommend you set up a demo account with your broker before you start trading for real. It’s easy to win and lose money very quickly when trading, so it makes sense to get a feel for the platform you’ve chosen as well as the ebb and flow of the cryptocurrency market.
In essence, all you need to do is take a position on whether the price of your cryptocurrency will increase or decrease. If you think it will increase take a long position (buy) and if you think it will decrease, take a short position (sell).
You may opt to take advantage of leveraged betting, which is a feature of most trading platforms. Leverage enables you to put down a fraction of your trade’s total value as a type of deposit called a ‘margin’. However, this is a high-risk strategy, so it’s probably not for beginners. Experienced traders understand this, and use stop loss orders to mitigate risk.