Greetings to All
I wish you all will be great by the blessings and compassion of Almighty Allah.I warmly welcome all you in my participation to the Steemit Engagment Challengem Season 8 Week 2 in the Steemit Crypto Academy.We always find the new things amd new topics to learn in every challenge of the Academy so lets discuss the topic that is Blockchain Oracles this time.
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Blockchains oracles act as the bridge or the middleware that provide the service to connect the blockchain to the external traditional system.These are the entities that act as intermediate between blockchains and external data.
These oracles can be explained as that sends or recieve the data from the external sources and then this data is used to complete the transactions and furthur processings.Oracles can be considered as the third party service that aware the blockchains to get the data of different real world scenarios and store them in the smart contracts and show the response accordingly.
There are many types of blockchain oracles that are divided according to their working and functioning. I will discuss it types later in a question.Blockchain oracles provides us many services the data can transferred from both sides from the real world to the blockchain or from the blockchain to the real world.
There are many workings that are performed by the blockchain oracles due to their connection to the real events.There are many sensors of the temperature, movements etc are executed that works on the policy of the blockchain oracles that connects the offchain and onchain data and generate response accordingly.
The information is firstly transfer for example from the external environment to the blockchain then this information is validated and approved after the athentication there is an event of smart contracts for the verification of the data and once the data is verified It is executed from the smart contracts on the basis of inputs or outputs.
- Example
The most common example we see for the blockchain oracle in the real world is the food saftey. The sensors are use to trace the food from its origin to the plates.As we know that the Blockchain data is unchangeable the food can be traced from the industry to the supermarket by utilising the example of blockchain oracles to ensure the Saftey.
Many tools are used to collect the data in the blockchain oracles such as APIs ,SDKs ,IoT sensors etc. After receiving data is stored in the smart contracts for the utilization or execution.
| So blockchain oracles are of many importance to build the connections of the real world to the blockchains and execute the necessary processings accordingly. |
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There are many types of blockchain oracles based on their functioning and complexity. Blockchain oracles comes up with many shapes and sizes and different smart contracts such as the hybrid smart contracts etc there are various processings or validations and computation of the blockchain oracles etc some of them I will discuss here.
Input Oracles |
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The most vastly used oracles are the input oracles these are limited to work to fetch the data from the real world and delevier to the blockchain for the implementation . It is very useful in the way that the external data is analyze on the blockchian and then response is generated accordingly.
Outbound Oracles |
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In output oracles the data is transferred from the blockchain ecosystem to another system.Such as in the banking networks these oracles are utilized. It distributed the data from the blockchain to the external party that can be an external database.
It's most common example can be smart contracts that checks the supply of a cryptocurrency token and it implement these oracles in processings.
Software Oracles |
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These are the oracles that gets the information or data by connection with Internet or with many online resources. Different types of softwares are used to connect with digital sources. They are commonly used for accession data from different sources such as flight exchange rates and market fluctuations.
Hardware Oracles |
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Hardware oracles are the type of oracles that uses and different pieces or equipments to collect the information such as different sensors scanners thermometer etc. The information that is first from different sensors is stored in the oracles smart contracts and later it is used for executions.
Centralized Oracles |
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As reffered by their name these are the oracles that have the control of data to the particular authorities and these are not considered as much efficient or supportive due to the security issues. These oracles are not considered too secure because any scammer can easily hack.
Decentralized Oracles |
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These oracles decentralised and there is not the control of any single party instead the data is validated through different nodes or connections from different sources. This Oracle is mostly considered as more secure because the data is validity through thousands of nodes.
Deterministic Oracles |
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Deterministic Oracle are built on the trusted data sources in which different algorithms are used to store the data. This stored data is later used in different industries. It has the high probability of accuracy.
Decentralized oracles is an oracles in which the storage of the data is not controlled by any single entity the data stored is validated by the thousands. of nodes that improve the working and make the connection bridges more reliable.
There are many benefits that came along with the decentralisation of the oracles in the centralised form the data is stored or validated by the single entity which make it the less relaible source and also effects the working of the oracles.
Centralised oracles have the less security thats why the decentralized oracles was introduced that perform the workings in more reliable and better way.Its more use able because of its reliability speed and accuracy as the data is validated from the thousands of the nodes.
There are many examples of the decentralized oracles in the market the most famous are different APIs, SDKs, Chainlink that are working on the nature of decentralization.
Due to their reliability it is although used in many businesses and industries but still there are some drawbacks related to their budget. The are consist of thousand of nodes and data is modified in different ways thats why a large budget is required for its infrastructure.
| Decentralized oracles are considered as the more accurate and reliable oracles in the sense of validating the data and their processings. |
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In the cryptocurrency world the decentralized oracles are used widely in different field or industries. These oracles fetch the information from the real world and this information is utilised and validated to perform the related execution some most common use case is of the decentralized oracles are following.
Finance |
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Didi centralised oracles are mostly used in the financial systems or market. Different types of collections are performed and capacity of buying and signing gives calculated through the oracles that is stored in different smart contract.
Different applications uses day in bound oracles affect the prices of assets and public goods for their application uses.
Insurance |
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Another vast use case of decentralised Oracle is in the insurance policies. The customer and the company always wanted to build a trusted relationship between each other so that there will be no any confusion in regards to the transactions and payment. Whenever a customer is linked with an insurance company you always want to build a trust worthy environment and want to see that his payments and transactions are fully validated with transparency.
Most of these insurance companies are not transparent in this regard decentralized oracles are used to make the system transparent and development the trust between the customers and the insurance companies. It develops the environment that ensure the customers payments are fully validated by a different nodes using the decentralized oracles.
Cross chain |
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This is also the use case of decentralised Oracle in which blockchains are inter link with the each other and share the information or data.The service is called as the cross chain service and is also the use case of the decentralized oracle.
The data shared can also be used by interlinked blockchains for the furthur processings and executions.
Conclusion |
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Oracles are very important for the development of blockchain .These oracles helps to share the onchain and offchain information with each others Decentralized oracles have very vast use cases kn different fields.
So that was all from my side about thr topic.I hope that you all will like to read the post and support the content.
I would like to invite @steemdoctor1 ,@preye2,@waterjoe , @princa to participate in the contest
Regards:@mateenfatima |
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Dear friend
You have explained all questions very well.
You have explained very well what is the role of blockchain oracles how the act as a intermediate for the transfer of Information and how the facilitates the blockchain world.
Further more you have explained in very detail the different types of Blockchain oracles and made it clear for everyone.
Then you give us the importance of decentralized oracles which are more fast Precision and accuracy as compare to Centralralized oracles.
You have explained all the parts of topic very well.
Good luck
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Thanks a lot for your valuable comment.
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