Oftentimes in the decentralised world, we immerse ourselves in fancy and well-known products & features, overlooking some of the most important developments that are not limited to the digital space.
Whether it’s NFTs, DAOs, or the latest tokens, they are fun, rewarding ways of spending time online that aren’t quite part of our larger-scale economies yet.
There are a set of reasons for such phenomena but one of the most prominent is the lack of real-world utility, assuming that earnings don’t fall into the utility category. One of the largely forgotten or misrepresented services on the blockchain is none other than the oracle which we will be diving deep into in this article.
Without further ado, let’s start our discussion and find out why blockchain oracles can operate magnificently in both digital and physical worlds, enabling mass adoption of Web3 solutions!
What’s A Blockchain Oracle?
Essentially, oracles are mechanisms bridging the blockchain and the physical by enabling information and data transfer from real-time events & their outcomes to smart contracts, and the other way around.
The reason why oracles are so brilliant is their limitless possibilities which can impact the entire world in a heartbeat – weather, sports outcomes, market prices, political events – all can be decentrally represented on the blockchain as they happen, and Web3 participants get a chance to observe, vote, bet on these outcomes, understanding the world around them better without the need of guesswork on traditional, unreliable news sources.
Developers and software engineers can think of oracles as APIs (Application Programming Interfaces) that don’t remain in databases and client-side programs, but rather help us work with instantly updated real-world data that can be implemented in any part of the decentralised ecosystem the internet of tomorrow is powered by.
Interestingly, even though you might have not heard of blockchain oracles until this day, their presence has been active for quite some time now.
Biggest Players In Oracle Networks
Chainlink, one of the largest crypto ecosystems today with its native $LINK token known by nearly everyone in the cryptosphere, is arguably the largest and most trusted network of blockchain oracles used by projects across the globe.
Chainlink provides anyone with integrative market & data feeds, random data generators for NFT projects and blockchain games, smart contract automation, real-world blockchain and cross-chain communication, and others.
Such services, when properly integrated and developed on top of, can dramatically accelerate the efficiency growth of spaces like insurance, NFTs and gaming, enterprise, and social issue tackling, through the more understandable and interpretable means of working with meaningful data.
Some other major player projects focusing on blockchain oracle utility spreading are :
- Witnet, a censorship-resistant ecosystem with similar features to Chainlink,
- Security, certification, and software freedom-focused Provable aims to reinvent finance, insurance, and even gambling.
- Paralink Network, another oracle network has invented its own query language specifically for smart contracts called PQL (Paralink Query Language) that helps build new data pipelines for the betterment of industries.
- DOS Network made oracles compatible with heterogeneous blockchains and scaled them to the limit.
Almost each one of the blockchain networks mentioned above and a number of other smaller innovators in the space, is welcoming the entire Web3 community to build new projects with their cutting-edge tools and even run massive grant programs for the builders dedicated to turning the world of data around for the better.
Hardware Running Smart Contracts
What’s even more exciting about oracles is that just like crypto wallets, they are not limited to software and have their own hardware implementations.
For example, if the data being gathered is focused on products sold, barcode scanners could have mechanisms for translating each scan to smart contract data benefiting a business’ needs.
With that in mind, nearly any information reading device like electronic sensors, even cameras, can be adapted to blockchain oracles for creating more trustless processes in business, logistics, or entertainment.
Today we’ve learned the intricacies of oracles that power data transfers from the real world to the blockchain. The key to understanding the impact of oracles lies in the spaces they can be applied to.
Considering that the modern world is powered by data and decision-making based on it, nearly every industry can benefit from blockchain oracles. However, oracle projects often start with better interpretable data from such sources as weather, sports event outcomes, and other common types of data we are used to on a daily basis.
Voting and prediction markets are still largely untapped concepts in Web3, at least from the perspective of mainstream audiences – oracles might just allow them to arrive in regular people’s minds more often.
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