Steemit Crypto Academy Contest / S8W4 - Blockchain Oracles

Hello everyone, how are you doing, I hope everyone is doing great, I welcome you to week 4 season 8 of the engagement challenge, and here I shall be participating in the contest discussion of "BLOCKCHAIN ORACLES".

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Do you know what Blockchain Oracles are? We want to know your opinion.

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Blockchain Oracles serve as a third-party network that is used to source and validate data from off-chain networks, and then in response, they forward the data back to the blockchain network. This made them act as a bridge between the blockchain network and external sources of information (Mostly off-chain) and this method enables the blockchain network to gain access to real-world data in an instant.

Blockchain Oracles have become essential in the blockchain ecosystem because they improve the efficiency at which blockchain applications access external data and this would not have been possibly accessible the other way around.

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Where Blockchain Oracles are most important are in the DeFi world, NFTs, insurance, and others. The Decentralized finance (DeFi) space relies purely on accurate data such as asset prices, the APY, and market conditions, the blockchain oracles are then required to provide this data to the blockchain network in real-time data so as to enable the DeFi applications to function precisely.

Blockchain Oracles are also essential in the NFT space, in the way that they were used to provide verifiable data on the true ownership and legitimacy of the NFTs.

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What are the types of Oracles?

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Since we understand the major importance the oracles add to the blockchain network, it's important to know that there are several types of them as well, with each having its own uniqueness and holding different importance to the Network.

• Decentralized and Centralized Oracles

Decentralized Oracles are oracles that operate in a peer-to-peer manner, the decentralized oracles allow several sources to provide real-time data to the blockchain network at the same time, decentralized Oracles are more secure and reliable than centralized oracles.

while;

Centralized Oracles are controlled by a single network, and they also provide data to the blockchain network, meaning they get their real-time information from a single source alone and deliver it to a blockchain network. This makes them less trusty as the information gotten from a single source might not be accurate or a possible compromise from the source is possible.

• Human and Computational Oracles

Human oracles are another type of oracles, these types of oracles involve individuals providing accurate data to the blockchain network, and they are used in applications that require human input, such as voting systems, and any other applications that require a human decision.

while;

Computational oracles are a bunch of algorithms that are used to provide data to a blockchain network and they are used in applications that require computational power, such as artificial intelligence applications.

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• Software and Hardware Oracles

Software oracles are more like computer program that is basically built to source information from an off-chain network and then forward the data to the blockchain network,

while;

Hardware oracles are physical devices that are basically built to perform the same functions as software oracles but just that they are physical, and they are most often used in IoT(Internet Of Things) applications, where they are used to provide real-time data from sensors and send the information to the blockchain.

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• Inbound and Outbound Oracles

Inbound oracles are used to send data from an off-chain network to the blockchain network, while outbound oracles are the complete opposite meaning they are used to send data from the blockchain network to an off-chain network.

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What do you think about decentralized Oracles?

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Decentralized Oracles have more uniqueness over the other types of oracles and particularly more advantages than centralized Oracles.

Decentralized oracles have proven to be more secure and reliable, simply because the oracle depends on multiple sources of information, and it can't be compromised or manipulated since all the information provided is coming from several nodes.

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They are also more truthful, what this means is that the decentralized oracles can be relied on to provide accurate information , and the fact that they operate using peer-to-peer makes them provide unbiased data, and they don't have the use for intermediaries to provide information.

Decentralized Oracles are more transparent, meaning that, once the oracles are used to provide data and it is immediately recorded on the blockchain, and the data cannot be changed or compromised, and this makes them perfect for blockchain applications that require more transparency.

I believe the decentralized oracles have more uniqueness, and the fact that it is not controlled by a single entity makes them trustworthy, you can depend on them for accurate data and be sure of no information manipulation from their source.

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Give us a use case of a decentralized Oracle.

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• NFTs

The NFTs are a good example of a use case for a decentralized Oracle, a decentralized Oracle is essential in this space in the sense that it can be used to provide verifiable data on the ownership of NFTs. NFTs (Non-fungible tokens) are digital assets that define ownership of a unique asset, such as art, or any digital assets. The ownership of NFTs can then be verified using Blockchain Oracles, and it can be used to provide transparency in the NFT market.

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Another good example of decentralized Oracles is Chainlink, Chainlink is used to provide real-time data on the ownership of NFTs, which thus enables buyers and sellers to verify the authenticity of the NFT before purchase. immediately this is passed through, the data will be recorded on the blockchain, which is to make sure it can't be tampered with.

• GAMING:

Decentralized oracles can also be used in the blockchain gaming industry, the oracles will then be used to provide real-time data about the gaming events, such as the result of a battle or the completion of a task.

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This can help to ensure that gaming results are transparent, and this helps in reducing the risk of cheating or manipulation.

• DeFi:

Another common use case for decentralized oracles is in the DeFi space. The DeFi space requires real-time data for situations like cryptocurrencies price and market conditions, stocks price, and others, this will make the Defi network operate in an effective manner.

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Decentralized oracles can be used to provide data securely and transparently in the Defi network, ensuring that DeFi applications operate without manipulation and making them reliable for usage. A good example of the decentralized oracle platform is Chainlink, which is used by many DeFi protocols to source accurate information and more dependent price feeds.

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Conclusion

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Here comes my conclusion on the topic Blockchain Oracles, blockchain oracles are a tool that is used to source information between the off-chain source and the blockchain source, and there are several types of this with each having its own importance.

The decentralized oracles have proven to be the most effective in the types with several use case, they can be used to prove ownership of NFTs, and it is more transparent and immutable to manipulation.

Thank you everyone for coming, I hereby invite @solexybaba, @josepha, and @Sahmie to participate in the contest as well.