^source

Blockchain technology brings with it a new wave of technological change and aims to change several aspects of value tracking.

• How we manage our money
• How we track goods in transit
• How we record asset ownership

And much more but the sector is still in its infancy, and decentralisation brings with it, its own set of restrictions and problems. There are many chains with issues of scaling, speed, security, and to become a better option than centralised services.

Another current restriction of blockchain is getting transaction data from several sources and syncing it on-chain. To import data into chains, oracles are a concept that may hold the key.

What is an oracle

An oracle is a method used to give a blockchain or smart contract the ability to interact with external data sources. An oracle is a way to provide data to flow between off-chain and on-chain events. Firstly inbound oracles push off-chain or real-world data to the blockchain from multiple sources, whereas their outbound cousins do the opposite: they inform an entity outside the blockchain of an event that occurred on the chain.

^source

The Need That Blockchain Created

Oracles can be hardware or software, that act as data feeds, usually from a third-party service, that inform the blockchain about events that occurred off it. Let's say you have a smart contract that needs to release payment when a particular obligation is met by one of the parties like submitting a form.

The oracle will confirm that the requirement was met, and will send a trigger to verify the conditions of the smart contract to execute the release of funds.

A real world example

A real-world example of an oracle would be let's say you purchased an eCommerce product from a site and they place it in a drop locker for you to pick up. You can then use your wallet address as a way to open the locker.

The locker will check the wallet address along with other requirements perhaps an order number or an ID and then unlock to provide you with access to your package. The locker itself is an external source speaking to the blockchain indreictly via the help of an orcale and settling an on-chain transaction.

The man in the middle

Blockchain is supposed to remove intermediaries from transactions, yet that only takes the tech so far, and that's why they need for oracles has arisen: they are, by definition, the middleware and provide a bridge between the real world and smart contracts.

Oracles are not full proof

Given the fact that a single data source can be corrupted, it leaves points of failure connecting to the blockchain, which is why their needs to be failsafe in place. Oracles will need multiple confirmation points added to a smart contract to ensure it can be executed safely in a trustless method.

This possible security issue is the current dilemma with the implementation of oracles; not every transaction can have several data points to verify what one oracle is saying. Their needs to be conditional layers placed to ensure oracles don’t end up costing more than they are worth with fraudulent transactions.

If oracles can be implemented on blockchains, it will start to bring the internet and the real world closer together and bring in a world of micropayments and trustless transactions that could disrupt many industries and eliminate the need for several archaic payment and custodial services.

What do you think about Oracles? Do you think it will help or hurt blockchain?

Previous ADSactly Crypto posts

• ADSactly Crypto: What Are SegWit Bech32 Bitcoin Addresses?
  
• ADSactly Crypto: What Are Coin Mixers?
  
• ADSactly Crypto: What Does Wash Trading Mean In Cryptocurrency?
• ADSactly Crypto: How Bitcoin Futures Could Affect The Future Of Bitcoin

---

---

Click the coin below to join our Discord Server

---

Thank You