Category: 8. What is an Oracle in Blockchain?

Chainlink is just one of many providers of decentralised oracles, each with a slightly different approach to solving the oracle problem. In truth, all solutions include some sort of compromise or vulnerability. The sheer complexity of Chainlink’s three-layered solution is an issue as it creates a broad attack surface for bad actors to find a… Continue reading Problems with Oracles

Having established what a blockchain oracle is, how they function and the challenges they present, we can look at some practical examples to put all of this into perspective. DEFI (Decentralised Finance) DEFI has emerged as one of crypto’s most significant use cases, with the market capitalisation of the biggest DEFI coins touching over $170bn… Continue reading Decentralised Oracle Use Cases

A truly Decentralised Oracle Network needs to combine multiple independent oracle node operators and multiple reliable data sources. Chainlink Price Feeds attempts to solve the issue of a single point of failure by ensuring  decentralisation across the three layers of the oracle — the data source, node operator, and oracle network levels.  BTC/USD Oracle Example… Continue reading Chainlink decentralised oracle

One of the most popular decentralised oracles is Chainlink which we can use as an example to illustrate the way blockchain applications use oracles.

Data feeds aren’t unique to blockchains; almost all centralised digital applications use API feeds but require some kind of trust-based authentication to confirm data validity.  The most apparent way oracles could verify data would be to replicate the centralised approach to accessing data in the off-chain world, but this immediately challenges the decentralisation nature of… Continue reading Trust and the Oracle Problem

Software oracles The most common kind of oracle is software that aggregates data already available on the internet and feeds it to a Smart Contract, such as price data for cryptocurrencies.  Hardware Oracles Some blockchain-based applications need to reference data from the physical world, which can only come through a piece of hardware such as… Continue reading What are the Different Types of Blockchain Oracles?

Though blockchains require off-chain data, oracles aren’t the source. They simply provide a means to query, verify and authenticate external data sources provided via API Feed and then pass that data securely and reliably on-chain. Given that oracles are a conduit, they can function in several different ways varying by the direction of information flow… Continue reading How do Oracles Work in Blockchain?

In just over a decade blockchains have provided the foundation for a trillion-dollar cryptocurrency ecosystem but their design has a fundamental flaw. Without data from the outside world, described as off-chain, they would be very limited in the type of applications they could support, on-chain, verified and recorded within the blockchain.  Blockchain oracles solve that… Continue reading Why Oracle Services are used in Blockchain

An oracle enables permissionless blockchains like Ethereum to access data from the outside world feeding Smart Contracts which can then execute specific actions within supported digital applications (dApps). Without oracles, blockchain applications would be limited to local data and the huge growth we’ve seen in areas like DEFI wouldn’t be possible. In this article, we’ll… Continue reading What is an Oracle in blockchain?