Driven to the world of Blockchain Oracle

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Driven To World Of Blockchain Oracle

• Blockchain is ushering in a new wave of
  technological change that is significantly
  transforming the way we perform activities such
  as tracking goods in transit, managing our money,
  and recording asset ownership. Blockchain
  technology is still said to be in its infancy as
  there are still many blockchains that are plagued
  by issues such as security, speed, scaling,
  decentralization, etc.

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• The solution proposed by technologists to sort
  out these issues is to make use of the blockchain
  for certain transactions and to take the less
  critical ones offline. But when everything that
  happens off-chain is recorded digitally, it will
  not be sequentially recorded like in a
  blockchain. So, what can be done to sync a
  blockchain to record new information that is not
  determined by the previous on-chain transactions?
  This is where Blockchain Oracle comes into the
  picture.

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What Is Blockchain Oracle ?

• Blockchain Oracle can be understood as a
  third-party information source that has the sole
  function of supplying data to blockchains that
  permit the creation of smart contracts. At a
  fundamental level, smart contracts are
  self-executing contracts that contain the terms
  of the agreement between a buyer and a seller. A
  smart contract evaluates incoming data from an
  oracle and initiates a flow of execution based on
  the information received.

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• For example, consider Alice and Bob initiating a
  wager about what the temperature on Saturday will
  be. Alice believes it will be 20 degrees or more
  while Bob believes that it will be 19 degrees or
  below. They now design a smart contract that will
  pay the winner depending on what the temperature
  is. For the smart contract to find out the
  temperature and pay the winner, it must query an
  oracle or a trusted source and use the result
  obtained to begin a path of execution.

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• After going through a local news website, the
  temperature value is returned as 24 degrees for
  Saturday. The smart contract will then execute on
  its conditions and send the funds to Alice.

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Type Of Oracles

• Some of the popular forms of Blockchain Oracles
  are.
• 1. Hardware Oracles- This is tasked with sending
  data to smart contracts based on occurrences in
  the physical world. These can facilitate the
  tracking of goods in a supply chain. For example,
  if an object with an RFID tag arrives at a
  particular warehouse, this data will be sent to
  the smart contract.

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• 2. Software Oracles- This includes online sources
  of information that can be easily accessed, such
  as public databases and websites. These provide
  information on public transport, temperature
  readings, and the current price of financial
  assets. These are the most powerful type of
  oracle due to their inherent interconnectedness
  to the internet. This allows software oracles to
  supply up-to-date information to smart contracts.

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• 3. Outbound Oracles- These communicate smart
  contract data to external sources. Using the
  previous example, after Alice has been identified
  as the winner of the wager, the smart contract
  conveys this information to the wallet provider
  to automatically updating her balance for
  reflecting an increase in funds. Here, the smart
  contract itself operates as an outbound oracle.

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• 4. Inbound Oracles- This has the function of
  supplying data to smart contracts. This data is
  external to the smart contract, and once it
  receives information, it will begin its path of
  execution. The news website that supplies
  temperature readings is classified as an inbound
  oracle.

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• 5. Consensus-Based Oracles- The main function of
  this type of oracle is to query multiple oracle
  sources and arrive at an outcome based on their
  consensus. For example, instead of using one
  website source, four or five of them can be used,
  and if all of them return the same temperature
  readings, the smart contract can execute
  successfully.

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• The Oracle Disadvantage
• Though Oracles offer many advantages, there is
  one particular disadvantage which is

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• Oracles Require Trust
• The data sources used by Oracles to obtain and
  transmit information to smart contracts must be
  credible. If Alice had gained access to the local
  news website, it would be trivial for her to
  return a temperature reading of 24 degrees, thus
  allowing her to win the wager. Thus, if the data
  supplied by the smart contracts to oracles is
  faulty, security concerns will be raised
  regarding the validity of the executing smart
  contract.

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• A possible remedy for this would be to request
  data from multiple oracles instead of from a
  single one. Smart contracts can also be
  programmed to not execute at all, and this will
  require the intervention of both Alice and Bob.

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Blockchain Council Certifications

• You can check out our certifications, and kick
  start your career in the Blockchain space today.
• Certified Blockchain Expert
• Certified Blockchain Developer
• Certified Smart Contract Developer
• Certified Solidity Developer
• Certified Ethereum Developer

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