/biz/ - Business & Finance

>>16676480
The most simple way to explain it, is that Chainlink is a token for those who wish to operate a node in a "decentralized oracle system".

In order to run one of these nodes on this network, the user must stake Chainlink ERC20 tokens as collateral. The price will go up because the node operators must hold some of the tokens to do jobs which earn them money.

The best real world example of this, is taxi medallions. In order to operate a taxi cab prior to uber, Taxi drivers in NYC needed to buy a taxi medallion. The medallions had a very high price, as being a taxi operator was a profitable job, and the medallion also had resale value, as there was a limited amount of taxi medallions. There was more people willing to operate a taxi, than there were medallions, so the price rose greatly.

If running a chainlink node is a profitable business, a very similar effect will happen with chainlink tokens. In fact, they might get even higher since they need to have value equal to that of the jobs that they do.

It may not be a perfect analogy, but it is probably good enough to give a brainlet some idea of how Chainlink works.

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