Steemit Crypto Academy Contest / S8W4 - Blockchain Oracles|| 25% to #null
Hi steemian friends |
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Do you know what Blockchain Oracles are? We want to know your opinion. |
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An blockchain oracle acts as a bridge or intermediate as it facilitates in connection of blockchain to exterior World. It enables the transfer of information from one source to a real source. Before the blockchain oracles the transmission of data to the outside was not possible but now this problem has been solved and access of data has been possible by blockchain and its contracts can access data easily in the Real World.
I would like to explain it in an easier way. Before the knowledge of blockchain oracles, there was no bridge from fr contracts that can transfer from the inside network to the outside World. Therefore only limited excess of data transmission was possible due to the lack of a proper bridge of connection. As the knowledge of blockchain oracles now this issue has solved. The facilitation of in and on-chain is now becomes easy with the help of blockchain oracles.
It can be understood by a simple example of how blockchain oracles can help with on and off-chain data. For example, the two people had a bet for different proportions. How it can be divided between who is winning and who is the loser? But it can be done easily with the help of smart contracts in a way that it can execute in and output and thus winner can get profit. It was managed with the help of blockchain oracles which enable connection of on and off-chain data linking.
What are the types of Oracles? |
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As its clear that the connection between blockchain and smart contracts was only possible due to blockchain oracles. It made convenient for the data transfer very securely.
It can be processed in following steps.
- Data query
- Data verification
- Authenticity of Data
The different types of oracles are follow.
- Centralized and Decentralized oracles
- Hardware and software oracles
- Inbound and Outbound Oracles
- Human Oracles
- Computation Oracles
- Contract-specific Oracles
1. Centralized and Decentralized Oracles
In centralized and decentralized oracles they worked on different principles.
the centralized oracles working is based on a single commodity and data can easily be attacked and always at risk to disclose.
While the working of Decentralized oracles is established on numerous sources of entities therefore it has less chance of data hacking or attacked and can br processed skillfully.
2. Software and Hardware Oracles
The working software oracle is based on online sources such as databases, PDFs, and websites.
While the working of hardware oracles is based on RFID and sensors chips that belong to physical data sources.
The software oracles help get data exchanged from the crypto and forex exchanges.
3. Inbound and Outbound Oracles
The data transfer is carried out in two ways come in and go out.
The inbound oracles are responsible for carrying data from the exterior World to inside the blockchain entities.
While the working of outbound oracles is based on carrying data from smart contracts to the exterior of the World.
4. Human Oracles
The working of human oracles is based on the human. It worked on the principle of
- Data collection
- Checking originality
- Data conversion into small entities
This Oracle's based on the verification system, of the person who is going to contract data and thus there are fewer-minimized chances of data risk and deceitful chances. The working is more precise due to the security system.
5. Computation Oracles
The computational oracles working is based on the principle of blockchain difficult tasks or calculations. It is based to work on the calculation of input and produces the outcomes.
6. Contract-specific Oracles
As the name referred contract specific oracles it based on the working principles of one smart entity, while if multiple entities are required to develop we have to use an equivalent number of contract-specific oracles.
- The drawback of contract-specific oracles is that they are less frequently used as a lot of time is required to process them.
What do you think about decentralized Oracles? |
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The working of the centralized oracle was based on a single contract, but it was not safe as there was a more likely chance of hacking, attacking, and misleading data. Therefore it was not safe to data contracts.
As only single contracts operating in centralized oracles if there is mishandling takes place or the node is not working, tend to have corrupted data due to any reasons it leads to the production of haphazard conditions as the contracts can not be completed and lead to abrupt, data changes as there is no other contracts is working on. It leads to stopping all work. Hence it can be concluded centralized oracles are not suitable for data contracts.
To solve this issue there was the introduction of decentralized oracles.
It was found effective due to
- Multiple entities
- Fewer transformations
- Fewer risk factors
- More reliability
Similarly, the working of decentralized oracles also assists in verifying the data to increase precision. For getting more reliable results the working of decentralized oracles is based on the Shelling coin mechanism the data management is much more precise and processed quickly as compared to the working of centralized oracles.
With every passing day, the decentralized oracles got more attention in large sectors especially in mega business projects due to high accuracy and precision in work. But for this purpose, a mega amount of budget is needed as its working principles are based on numerous nodes system.
In the last after the above discussion may conclude that the working of decentralized oracles is much better, accurate, and organized as compared to centralized oracles.
Give us a use case of a decentralized Oracle. |
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As the decentralized oracles become very familiar due to high proficiency in data contracts from smart entities, to the exterior World. As it worked as a bridge for data transfer from contracts to outside the real world with more speed and precision. It comes to be outstanding in the World of cryptocurrency. It may open new doors for the crypto World and also in the blockchain business. There are various uses of decentralized oracles few are as follows.
1. Decentralized oracles and Insurance
During the process of insurance, a common issue of the transparent system may evolve. In this issue, one insurance person has more knowledge than the company. He knew all about his possession while insurance companies has limited knowledge about it. Now, the customer wishes to clear all his paid payments but this process is not slow and had minimal accuracy.
How decentralized oracles helped it out?
The issue of data accuracy is solved with the help of API which after assembled sends data to blockchain oracles. Here the sent information is being assessed, and corrected after verification with the help of blockchain oracles. In this way, in minimal time transparency can be furnished to customers and insurance companies more precisely.
2. The decentralized oracles and DeFi
The working principles of DeFi require an economic database of demands and purchases. For this purpose, an oracle is required to proceed computation of a client's borrowing ability.
The AAVE project is an illustration of DeFi. It is based on principles of execution of prices of different investment sent by the use of smart contracts. Besides, the decentralized system helps provide the real World investment to the users.
3. Non-Fungible Tokens
The working of Non-Fungible Tokens is primarily based on the use of decentralized oracles in a way that may able to remake their dispersion, occurs, and rates. For the execution, it used the computational oracles by the random use of Non-Fungible Tokens. Thus it can produce and assess the random Non-Fungible Tokens.
The Aavegotchi is based on the DeFi collection game, is it is based on the authorized ussharinghare their NFT avatars, and after that, it was sent to the Aavegotchi metaverse. Here the rise in the price of their NFT is provided by Chainlink Verifiable Randomness Function. It may helpful for on-chain random which can be checked by the users unassisted.
Conclusion |
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In the last i would like to conclude that blockchain oracles has many advantages as it enabled connection of smart entities with real World by acting as third party connection. Moreover, it increased the precision of work, it facilitate large sector, business proficiency more than before and helped the fast out put with less risk and hacking chances. |
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kind regards
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Dear @drhira first of all thanks for taking part in the content and sharing your thoughts and search about Blockchain oracles with us.You made an very well blog about Blockchain oracles and i visited and read your blog and i got much more information from your blog and i wish you good luck for the contest.
Yes you're right Blockchain oracles act as a bridge between Blockchain and the interior world and oracles transfer information from world to the smart contracts of Blockchain.you explained very good point that before Blockchain oracles there is no way of connection of Blockchain with the world and then the Blockchain oracles act as a bridge between them and give access to collect the data from the world.You explain very well and easy about the major types of Blockchain oracles and it's simple to understand these types from your blog .
You mentioned about decentralized Blockchain oracles and they are more secure because firstly thier was a use of centralized but they are not much safe and these decentralized Blockchain oracles are very safe and they collect and validate data and then transfer it to Blockchain.You explained the use case of decentralized Blockchain oracles and these are very good and simple.Overall, your blog is amazing and i appreciate your blog and thanks again for sharing with us.
Thank you for reading my post, and highlighted different parts of my posts, it gave me more strength to do good work.
Thank you for support
Your post is extremely valuable and I learned a lot about this technology from it, thank you very much.
Thank you for reading my post and for kind comment
Dear Drhira
I thoroughly enjoyed reading your post about Blockchain Oracles for the Steemit Crypto Academy Contest Your explanation of what oracles are and how they work was clear and concise making it easy for someone new to the concept to understand
I especially appreciated the real-world examples you provided to illustrate how oracles can be used in various industries from finance to supply chain management Your insights into the challenges faced by oracles such as the need for reliable data sources and the potential for manipulation were also very thought-provoking
Overall your post was informative engaging and well written Thank you for sharing your knowledge and expertise on this topic with the Steemit community
Best regards