Ethereum (ETH) vs Chainlink (LINK): Which is Better?

If you’re involved in cryptocurrency, you’ve probably heard of Ethereum (ETH) and Chainlink (LINK). Both are popular cryptocurrencies with their own distinct features and use cases.

In this blog post, we’ll compare Ethereum and Chainlink, so you can decide which is the better investment for yourself. You could think of these two like this: Ethereum is the engine that runs the car Chainlink.

 

History

Ethereum: Ethereum was announced in 2014 by Vitalik Buterin, a Russian-Canadian programmer. Buterin proposed the development of Ethereum in a white paper in 2013.

The system went live on 30 July 2015, with 11.9 million coins pre-mined for the crowd sale. This represented approximately 13 percent of the total supply (99 million ETH).

Chainlink: Chainlink was created in 2014 by Sergey Nazarov and Steve Ellis. The Chainlink project is a decentralized oracle network. It connects blockchain-based smart contracts to real-world data sources. This allows smart contracts to access off-chain data such as weather data, prices, etc.

What Are They, And Why Were They Created?

Ethereum and Chainlink are both decentralized platforms/ blockchain networks. They both aim to provide a more secure and efficient way of conducting transactions. Both platforms were created in response to the shortcomings of the traditional banking system.

Ethereum was created as a way to securely and efficiently conduct transactions without the need for a third party. This means that transactions on the Ethereum network are faster and more secure than those conducted through traditional banks. Ether is the native cryptocurrency of the Ethereum blockchain.

The Chainlink network was created in order to provide data to smart contracts (Chainlink smart contracts). This data is then used to execute transactions on the Ethereum network. By providing this data, Chainlink makes it possible for smart contracts to be executed more securely and efficiently. Basically, Chainlink facilitates external data feeds.

The Chainlink decentralized oracle network is a set of nodes that adhere to protocols. Node operators are required to stake (chainlink node operators).

 

Price History

Ethereum: The price of Ethereum (ETH) has seen a lot of ups and downs over the past few years. In 2015, ETH was trading around $0.60 before seeing a huge spike in 2016 to over $14. This was followed by a crash back down to around $6 in early 2017.

ETH then had another big run-up in late 2017, reaching almost $1,400 by January 2018. Unfortunately, this was followed by another crash, and ETH prices fell back down to around $200 by mid-2018. Prices then slowly recovered throughout 2019 and 2020, and Ethereum reached a new all-time high of over $2,000 in January 2021.

At the time of writing, ETH is valued at $1 283.34.

Chainlink: As of September 2019, LINK tokens were trading at around $2.50 USD. However, in December 2020, Chainlink reached an all-time high price of $22.50 USD. Given the current market conditions, it is likely that the price of Chainlink will continue to increase in the future.

The Chainlink network secured over $75 billion of value in 2021. At the time of writing, LINK tokens are worth $6.98.

Market Cap

Ethereum: At the time of writing, the market capitalization of Ethereum is $150.68 billion.

Chainlink: The market cap of the Chainlink network is $4.4 billion.

 

Daily Transactions

Ethereum: When it comes to processing daily transactions, Ethereum (ETH) is faster and more efficient than Chainlink (LINK).

In addition, Ethereum has more nodes than Chainlink, which helps to distribute the workload more evenly. As a result, Ethereum is able to handle more transactions per second than Chainlink.

Chainlink: Daily transactions in 2022 were around 2,500 per second.

 

Block Size

Ethereum: The block size of Ethereum is 1MB, which is smaller than the block size of Bitcoin (BTC) at 2MB. The smaller block size of Ethereum means that there is less data stored on each block, which can lead to faster transaction speeds.

Chainlink: Chainlink’s blockchain is actually growing at a faster rate than Ethereum’s.

 

Similarities

• Both are decentralized platforms that aim to provide a more secure and efficient way of conducting transactions.
• Both platforms use blockchain technology and smart contracts to facilitate these transactions.
• Both Ethereum and Chainlink tokens are required to be used in order to access the respective platform’s features.

 

Differences

• Ethereum is a decentralized platform that runs smart contracts. While Chainlink is a decentralized oracle network that connects blockchains to real-world data.
• Ethereum uses its own native currency (Ether), while Chainlink has its own ERC-20 token (LINK), which is used to pay for services on the Chainlink Oracle Network.
• Ethereum is focused on building a global computer network, while Chainlink is focused on powering secure smart contracts.

 

Risks

Both have a low risk, but let’s take a look at this in more detail.

Ethereum: Firstly, Ethereum is a platform for smart contracts, while Chainlink is primarily a connection layer for blockchain applications. This means that while Ethereum can be used to create and execute contracts, Chainlink must be used in conjunction with another platform in order to be useful.

Secondly, Ethereum uses its own native currency, Ether, while Chainlink relies on existing cryptocurrencies like Bitcoin or Ethereum. This could make it more difficult for Chainlink to gain widespread adoption, as users would need to first acquire the necessary tokens before using the platform.

Chainlink: There are a few risks to keep in mind when considering investing in Chainlink. First, the project is still in its early stages and has yet to be fully developed or implemented. This means that there is a risk that the project may not be completed or may not work as intended.

Second, Chainlink relies on Ethereum for its operation, so any issues with Ethereum could also affect it.

Finally, because the Chainlink platform is still new and relatively unknown, it may be more volatile and susceptible to manipulation than other, more established cryptocurrencies.

 

Where to Buy

Ethereum: If you’re looking to buy Ethereum, there are a few different options available to you. One option is to use a cryptocurrency exchange like Coinbase or Binance. A second option is to purchase Ethereum directly from a seller.

If you decide to use an exchange, you’ll need to create an account and deposit fiat currency (like USD) into it. Once your account is funded, you can then exchange your fiat for Ethereum.

If you choose to use a peer-to-peer marketplace, you’ll need to find a seller that’s willing to accept payment in fiat currency. Once you’ve found a seller, you’ll need to create an account on the platform. Then transfer the appropriate amount of fiat currency into it. Once the funds have been transferred, you can then purchase Ethereum from the seller.

Chainlink: If you’re looking to buy Chainlink, a few different options are available. You can buy it directly through the Chainlink website or through one of the many exchanges that list LINK.

Coinbase is one of the most popular cryptocurrency exchanges and allows you to buy LINK with either fiat currency (USD, EUR, GBP) or other cryptocurrencies (BTC, ETH). Binance is another popular option that offers a variety of trading pairs for LINK.

If you’re looking to buy Chainlink with fiat currency, you can also do so through Simplex. Simplex is a payment processor that allows you to purchase LINK with your credit or debit card.

Finally, if you want to purchase LINK directly from another person, you can do so through a peer-to-peer exchange like LocalCryptos. LocalCryptos is an escrow service that helps facilitate these types of transactions.

 

Exchanging Ethereum For Chainlink

If you’re looking to trade your Ethereum for Chainlink, there are a few things you’ll need to do. First, you’ll need to find a cryptocurrency exchange that offers both ETH and LINK trading pairs. Once you’ve found one, you’ll need to make an account and deposit your ETH into your account.

Once your ETH is deposited, you can then place an order to sell your ETH for LINK. Once your order is filled, you’ll then have LINK deposited into your account, which you can then withdraw to a wallet of your choice.

 

Future Plans

Ethereum: The Ethereum 2.0 upgrade will be fully implemented, resulting in a more efficient and scalable network. -Sharding will be introduced, further increasing scalability.

Chainlink: One of their primary goals is to increase the adoption of the platform by enterprise users. To do this, they are working on making it easier for enterprises to integrate Chainlink into their existing systems. They are also working on expanding the capabilities of Chainlink so that it can be used for more complex data-driven applications.

Another goal of Chainlink is to decentralize the platform even further. Currently, most of the nodes on the network are run by a small group of companies.

 

FAQs

Is Chainlink linked to Ethereum?

Yes. Chainlink was one of the first projects built on Ethereum. It has been closely linked to the Ethereum community from the beginning.

Is LINK an Ethereum token?

Yes, LINK tokens are Ethereum token that is used to pay transaction fees on the network.

Can Chainlink only be used on Ethereum?

Chainlink can be used on any blockchain that has smart contract functionality.

 

References:

https://ycharts.com/indicators/ethereum_market_cap#:~:text=Ethereum%20Market%20Cap%20is%20at,70.53%25%20from%20one%20year%20ago

https://coinmarketcap.com/currencies/chainlink/

https://zipmex.com/learn/what-is-chainlink/#:~:text=Chainlink%20is%20created%20by%20SmartContract,create%20a%20decentralized%20Oracle%20network

https://cointelegraph.com/ethereum-for-beginners/who-is-vitalik-buterin#:~:text=birth%20of%20Ethereum.-,The%20birth%20of%20Ethereum,very%20much%20about%20digital%20currency

https://coinmarketcap.com/currencies/ethereum/

https://blog.bitmex.com/ethereums-new-1mb-blocksize-limit/

https://discover.luno.com/whats-the-difference-between-chainlink-and-ethereum/