What are oracles, and why are they crucial for blockchains?
You know that blockchains are inherently closed systems, right? Well, did you know that means what they can do is limited without oracles feeding them data? They can’t access commodity prices, crypto prices, real-world events, etc. on their own. It’s real tough, I mean these things are pretty darn crucial for useful apps. That’s why oracles are so important, they’re like the transmitters between on-chain dApps and off-chain data sources.
Blockchain smart contracts really need oracles to be expressive and useful, or as some like to say, to help smart contracts do cooler stuff. For example, if we set up a smart contract to transfer USDC worth one BTC from Zane’s wallet to Xeon’s wallet on a certain calendar date in Earth time, the smart contract needs an oracle to figure out the exact value of BTC in USDC to transfer to Xeon’s wallet. It needs non-stop awareness of the relevant date and time too.
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Of course, oracles need to work with accuracy, speed, and security. You can’t have an oracle slowing down a whole blockchain network or putting a smart contract at risk. However, not all oracles are built alike. Before picking your oracle, you need to compare their designs and metrics like quality of data source, number of data sources, latency or time to finality, and decentralization.
Centralized oracles go about their business with a limited set of data sources and tend to have multiple single points of failure. Decentralized and cryptographically secure oracles tap into multiple independent data sources, and they make sure that their node operators can’t coordinate with each other either. This gives smart contracts more accurate, tamper-proof data to act upon. And that’s what we’re all gunning for at the end.
Link to Register and Earn💰 👇
https://supraoracles.com/blastoff?ref=0e82c-287421
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