"The Role Of Decentralized Oracles In Smart Contracts"

Assalam O Alaikum

Hello dear friends! Well come to my post. How are you all? I hope you will be doing well by the grace of Almighty Allah. I'm also fine and enjoying my day. Today I'm here to share my knowledge with you about the topic "The Role Of Decentralized Oracles In Smart Contracts" in this Steem Alliance community. So let's start without any more delay of time.

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Dear friends, we all know that the role of blockchain technology is increasing day by day in the ecosystem of cryptocurrencies and other financial systems due to which they are improving themselves with the passage of time to meet with the needs of people. So among that aspects, the decentralized oracles plays a vital role in maintaining the integrity and credibility of blockchain technology.

This is because, the smart contracts and decentralized oracles have revolutionized them as they validate transaction without the presence of any intermediaries within the network. If we talk about the oracles, then we can say these are the entities which connects the smart contracts with the data which is present in the platform.

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These oracles plays a vital role in connecting the data with the real world use cases of the blockchain networks. This is because these oracles, take the control over the data which is present in the blockchain networks. These oracles can store a wide range of information about different aspects price of digital currencies, financial services and many others as well.

In this way, these oracles ensure the security, reliability authenticity and transparency of the networks. If we talk about the oracles, they can be found in two types such as centralized and decentralized oracles. From their name, we can understand that the centralized oracles are those who are controlled by the single entity.

They have a full control over the network and each of their activities are controlled by them. But the centralized oracles have some cons as if they are compromised they can send false information to the smart contracts which leads towards the incorrect execution in the network and may results in loss.

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Furthermore, these centralized oracles can damage the security and efficiency of the network as when the network fails, it manipulate the network which results in loss of useful information about the participants of the network. But on the other hand, in case of decentralized oracles, the things are different as they are designed to deal with such kind of problems.

This is because, the decentralized oracles don't rely on single authority and transfer the data through different different nodes which then transferred to the smart contracts. In results these consensus mechanisms which transfer data and the smart contracts ensure that the failure in nodes can't damage the security and efficiency of the network and thus prevent from frauds.

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The applications of decentralized oracles and smart contracts can be found in different financial sectors and other industries. In decentralized finance DeFi they have a great role because they help in creating the decentralized finance DeFi platforms and then help in executing the further working of them. They help in enabling the accurate trades, loan systems and insurance policies as well.

Besides them, the decentralized oracles have a crucial role in supply chain management systems as they help in tracking the products and reduce frauds and thefts. Despite all the advantages, the decentralized oracles face numerous challenges including the regulatory challenges, security and managing the data.

Conclusion

In conclusion, we can say that the decentralized oracles help in providing us the full potential to smart contracts by interacting the real world data in the most secure and reliable sources. That data is processed by the smart contracts and then stored in a safe place. That is why the decentralized oracles are becoming a very integral part of smart contracts and blockchain technology.

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Written by @abdullahw2

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Thanks All ❤️

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