Oracles and Decentralized Data Feeds: Bringing Off-Chain Data Onto the Blockchain Safely

Hello everyone, How are you doing, I welcome you again to my blog in the Steem Alliance community.

Today, we will discuss an interesting topic on the platform which will be: Oracles and Decentralized Data Feeds: Bringing Off-Chain Data Onto the Blockchain Safely

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• Introduction

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By providing a decentralized, and transparent method for managing data and transactions, blockchain technology is revolutionizing different tech projects, blockchains technology as well are isolated systems that cannot independently access or verify real-world data itself which is where oracles come in.

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What Are Oracles?

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Oracles are services that communicate, verify, and retrieve external data or information for the blockchain, They function similarly like an extension that connects the blockchain to the rest of the world and makes it possible for smart contracts to be carried out when the right information is provided and the conditions are met.

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Types Of Oracles

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Software Oracles: Oracle tools that get data from databases, APIs, and websites are known as software Oracles. They can, for example, provide information about stock prices, sports scores in real time, and weather conditions.

Inbound Oracles: These oracles help carry external information into the blockchain, they can, for instance, obtain an exchange's current cryptocurrency price, and maybe update it to each other.

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Consensus-Based Oracles: These are the types of oracles that use multiple data sources to provide a single piece of data, providing users with accuracy and reducing the possibility of manipulation.

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How Oracles Securely Bring Off-Chain Data Onto the Blockchain

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Decentralization: This works in a way of removing single points of failure, decentralized Oracles improve blockchain security, since they use free nodes to bring and check information, ensuring that individuals will have not to think twice about information feed, which means there is absolute trust in its data.

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Decentralized oracles help blockains to be more resistant to attacks and manipulation thanks to this strategy.

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Smart Contracts: This also works by integrating Smart contracts and Oracles to automate transaction requirements based on its external data, An insurance smart contract, for instance, can use an oracle to check whether the conditions of the use case are met and pay off automatically if the conditions are met.

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Oracle Use Cases

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It is a brainer that with all these qualities we've listed, we still don't know the use case of this, so, therefore, let us know that oracles provide real-time price data for assets, making it possible for DeFi applications to provide services like lending, borrowing, and trading.

Supply Chain: Oracles can also be used to monitor the location and status of goods throughout the supply chain, ensuring that there is delivery transparency and traceability.

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Conclusion

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By safely transferring data from off-chain to the blockchain, Oracles have been seen to be an important part of the blockchain ecosystem, Oracles make it possible for a wide range of use cases that bridge the gap between the blockchain and the real world applications by enabling data verification, decentralization, and smart contract integration.

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