Best Blockchain Oracles Projects – To the ancient Greeks, an oracle was a person who imparted knowledge from another world. In blockchains, oracles help blockchains gain external data. While blockchain oracles may not be prophetic, blockchains and smart-contracts (the code that automates blockchain transactions) cannot access external data on their own, they need an oracle to do it. Blockchain data is deterministic, meaning it has a sequence. Normal data is non-deterministic, meaning there’s no mechanism that proves the order by which the data was created. The problem is that oracles can ruin the decentralized data of blockchains. How?
One of the biggest problems when it comes to blockchains being used as a real-world tool is the “Oracle’s Problem.”
So what are oracles and what is all this?
Best Blockchain Oracles Projects – Run-through on Oracles
Let’s just go through it… blockchains, as we know, are chains of transactions where all transactions are stored in a transparent and decentralized manner meaning no one person controls all the transactions. Recently in 2014 Ethereum, came out and it pushed “smart-contracts.” Smart-contracts are ways of automating the logic and the transactions that happen on blockchains.
So…smart-contracts and they’re transparent because they’re written on blockchains if something happens. “A” happens… so different choices can happen or different things can take place based on the logic of the smart-contract. “Oracles” are needed for smart-contracts to get external data. So let’s say you have a blockchain that stores all the temperature information with houses all around Canada and the temperatures information with houses and let’s say if all the houses in Ottawa have an average of 40 degrees Celsius or more, then I’ll make “Path A” happen so for me to get the data from the houses in Ottawa, you need an oracle to connect to an external service.
Imagine you have a web service (server) that sends information to an oracle on a smart-contract which then causes certain outcomes to happen. A potential problem with taking this information from only one source/computer is that it goes against what the smart-contracts and blockchain technology were meant to solve in the first place.
So let’s say all of these 100,000 computers make a drastic decision based on what one computer says about the temperature in Ottawa.
If that one computer is corrupted or has somebody with malicious intent sending this information in via an oracle…then it could have drastic effects on the hundreds of thousands of computers that are connected to the network. So that’s called centralization and many blockchain projects are looking to solve the issue of centralization happening through oracles and oracles inserting data into blockchains
So one example of a product that’s looking to solve the oracles problem is ChainLink. What projects like ChainLink are trying to do is financially reward those who report on accurate data and those who help spread the information amongst many different computers another project is called Augur which is is basically the same thing but for prediction markets (predicting the future and thoughts on market sentiment).
So that’s a quick look at how some projects are trying to improve upon smart-contracts and how they’re trying to solve the Oracle’s problem because if the Oracle’s Problem is solved, then smart-contracts can continue to use external services such as application programming interfaces (or APIs for short) to get real-world data and actually, apply that logic in their blockchains in a clear and transparent manner where you don’t depend on one person for something that can drastically change the outcome of a blockchain network.
Best Blockchain Oracles Projects – Augur and Gnosis
ChainLink (LINK) ChainLink solves the Oracle’s problem with a reputation system and a network of data providers that connect to ChainLink’s special smart contract.
Augur: Same as ChainLink but for prediction markets. ChainLink argues that there is some manual data humans have to input into Augur and Gnosis, making ChainLink advantageous.
Gnosis: Very similar to Augur, but newer and handles data slightly differently.
Komodo: allows users to create “assetchains.” Assetchains are complete forks (copies) of Komodo and all its benefits, but with Oracle functionality to allow Komodo-based blockchains to communicate with eachother. Komodo’s “cryptoconditions” smart-contracts are powerful types of smart-contracts that help Komodo blockchains have extended functionality.
About the Author
Natu Myers helps blockchain projects get funded and evaluated by investors.