Steemit Crypto Academy Contest / S8W4 - Blockchain Oracles
Hello fellow steemians. I hope you are all doing good and finding this seasons crypto academy’s contest very interesting and educative. So far the topics of the contest have really helped me learnt a lot. Which is why i have made it a decision to be able to always participate in every contest of this season . The topic of this week’s contest is about what Blockchain oracle is. Blockchain technology is gradually moving or advancing in a new way or direction of technological advancement which is promised to completely change how we do things very soon. The blockchain technology is used in performing numerous work activities like monetary transactions and for security purposes. Blockchain actually used to not able to fetch information or data from the outside world. That’s off-chain, which has caused the performance of the blockchain to be facing some issues of speed, scaling and security. But with the introduction of the oracle, it is now possible for blockchain to access data from the out or real world which will help in the performance of the blockchain technology regarding the challenges it has been facing. |
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Do you know what Blockchain Oracles are? We want to know your opinion. |
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For blockchain being a one-way path, it is the oracle is the only way between on-chain and off-chain data. Which makes it a key player or tool which gives smart contracts vast or limitless usage inside the network. With the help of a blockchain oracle, it possible for a decentralized exchange to be able to keep track of how the stock market is trending. This will make it easy and simple for traders without the need for a broker. Which means the oracle is somehow performing the job of the broker here.
Which is only possible because it has had access to the data or information from off-chain. That’s from the stock exchange. As at now, oracles are being used for the purpose of price predictions on many decentralized exchanges. Even though more research and development is being conducted to explore the blockchain oracle technology.
What are the types of Oracles? |
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CENTRALIZED AND DECENTRALIZED ORACLES
Centralized and decentralized oracles; The centralized oracle has it data being managed by a single entity or a third party, that is it retrieves it data from a single off-chain source, there by making it venerable to attack.
Whereas with the Decentralized oracle are being managed of by a single entity but retrieves it data from multiple off-chain sources after which it is being brought together on-chain for validation.
SOFTWARE AND HARDWARE ORACLES
Software and Hardware oracles; The software oracle retrieves data from online sources that’s from the internet to process. This softwares could be from websites, applications and database and even informations on flight, and weather conditions.
With the hard ware oracle blockchain, it retrieves or gather it data from the physical world. The hardware oracle collects data from physical objects like sensors which are then linked and processed on-chain. That’s within the blockchain network.
INBOUND AND OUTBOUND ORACLES
In bound and outbound oracles; The inbound oracle plays a role of retrieving data from the outside world or off- chain sent into the blockchain network and then been processed.
The outbound oracle is responsible of delivering or exporting data from the on-chain, that’s within the blockchain network to the outside or physical world.
HUMAN CONSENSUS ORACLE
This type of oracle is based on a human’s ability to predict and gather any form of data and then checks or examine it authenticity and then converts it into an on-chain or the blockchain network. With the human oracle, few cases of venerability to attacks is experienced because the human has to prove themselves or their identity.
What do you think about decentralized Oracles? |
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If any one of the sources or nodes from which it retrieves or collects data breaks down or goes off. There would still be execution of the data because the it works with very large number of different nodes. This also because there is low risk and high accuracy in such blockchain oracle due to the high number of nodes. With the help of a chainlink, the selection of independent nodes from off-chain to on-chain allows validation on the network with the smart contract.
The centralized blockchain oracle will find it difficult to fulfill the contractual agreement if one of it’s nodes breaks down. This is because the broken node will be sending error messages to the smart contract which then makes this type of oracle less effective and reliable as compared to the decentralized one.
Give us a use case of a decentralized Oracle. |
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NON-FUNGIBLE-TOKENS
The items of an NFT are able to manipulate their appearance and value due to the work of a decentralized oracle. With the NFT, the oracle is being used to generate verifiable randomness of NFT items and to distribute it traits randomly.
Similar cases can be seen in play to earn games. Where by players stake their NFT characters whereas they begin exploring the game. The value of their NFT character increases as they play. This a typical scenario of a chainlink verifiable randomness function. Which works within the chain.
DEFI
The blockchain oracle on the defi calculates a trader’s assets total, his borrowing capacity and their collateral level and some financial data. The defi ecosystem uses the oracle to access prices of different assets that they can use in their smart contracts. The oracles are used in synthetic asset platforms and automated market makers to estimate a traders borrowing capacity real world assets and then focuses on the liquidity of the market.
INSURANCE
With the lack of transparency and trust in the insurance. It it sometimes difficult for the individuals involved in it to trust one another. This is because one party has a full knowledge of what is going on whereas the other has a very little idea about it. So the decentralized oracle works on this platform by collecting together data through API and then sending it to the blockchain network, after which the data is being processed with the help of the smart contract which will then provide a transparent result to the two parties to avoid any misunderstanding.
Conclusion |
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Thank you, friend!
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Itu sangat bener sekali, Saya sangat setuju penjalasannya yang anda beri👍
Terimakasih banyak telah memberi penjelasan yang sangat baik🤗
Salam @miswarofficiall
Amigo debes hacer comentarios con tus propias palabras. Estas copiando lo mismo que hace el autor.
Debes ser creativo con tus mensajes.
Muchas gracias y saludos.
I gave an example of his article which I really enjoyed.
Thank you buddy
Nice one dear friend
Dear friend @habdallah first of all thanks alot for taking part in Contest and i just read your blog about blockchain oracles and you explained each thing very simple and clear and anyone can learn from your blog and it's good thing that you learned so many things from this contest.When i visited your blog i also learned so much new information about blockchain oracles.
As you explained that blockchain oracles is a path or way that make possible blockchain to connect with the real world and it's totally right and blockchain oracles are the only way for blockchain to get information from the real world for smart contracts and some other purposes and it's right it's a way or path between off-chain and on-chain and you explained each thing very well with simple example that blockchain oracles work as broker between the blockchain and the real world and I'm totally agree with your answer.You explained the each type of blockchain oracles very clear and you're right its bridge and blockchain oracles firstly verifiy and validate data and then transfer it to blockchain and each type you mentioned with thier specific work is very well.
As you explained very well about decenterlizied oracles and you write that decentralized oracles handle by single entity but collect the data from different sources and then Verify and validate the data and this thing helped it to safe from the attacks or hacks.After that you mentioned about the use case of decentralized oracles in different sectors like defi & insurance and you explained all the things good.Overall you made a very good blog about blockchain oracles and i learned so many things from your blog and thanks again for sharing with us and wish you good luck for the contest ✨
Thank for your kind and benefitable feedback
Great post @habdallah this post was so enlightening. It is amazing to read about how blockchain oracle technology is connecting the on-chain and off-chain world of the blockchain. It's such a revolutionary concept, providing a way to access external data while still ensuring security and trust. I love the use cases you listed; especially the one about insurance, it seems like a great way to ensure transparency and trust between both parties.
Understanding blockchain can be daunting but your article made it a lot easier for me to comprehend. Thanks for breaking it down in such an accessible manner! Kudos to you for puttig together this awesome post.
You are welcome dear. Thank you for taking your time to read my article
TEAM 1
Congratulations! This post has been upvoted through steemcurator04. We support quality posts, good comments anywhere and any tags.Thank you
Greetings my dear friend @habdallah, how are you??
Glad to see you taking part in this week's challenge also. In this topic here you have shared what is your view on blockchain oracles and what you think it is how it helps us.
You have also shared types of oracles which are inbound, outbound, hardware, software and decentralized and centralized oracles.
Then you have also explained what you think of decentralized oracles and give 3 use cases of it.
Overall, you have presented quality content with us for which I say thanks to you. I wish you success in the contest also :)
Thank you for your positive comments
My Pleasure :)
@habdallah
Greeting dear friend
In the introduction you told that it was not possible to fetch data from the external word as there was no medium for intermediate. Lack of Bridge for this transfer and hence blockchain was facing many issues in data transfer.
But now these issues has been solved by the knowledge of the option oracles as it act as a mediator for the connection of data on the contract to external world and make it possible for the transfer of data from one source to real word.
You have explained different type of oracles and mainly touch all the types with a good examples especially centralised and decentralized Oracle, in bound and outbound and human conseus oracles.
You explain in detail why the centralised oracles are becoming familiar as it is using multiple nodes system and if 1 or 2 notes are broken data couldn't be waste as it is working on a large scale and make data accuracy more possible as compared to centralized system which is working on only one node and the chance of losing data was more.
Wish you very good luck and success
Thank you for reading my article and for the comments too
Good job bro
Thank you