Oracles

BlockworksOct 4, 2019 ⋅ 1 min read

Written by Steve Miller

Introduction

Oracles verify claims regarding the state of world, acting as gateways for smart contracts to obtain the inputs needed to execute their instructions.. Oracles ingest data feeds from external systems providing the inputs to smart contracts required for evaluating their parameters. Multiple external systems are accessed to arrive at a single “truth,” ensuring the robustness of the information smart contracts are acting upon given the irreversibility of their execution.

Oracles function as a bridge for blockchains to interact with external parties without compromising their security or censorship resistance. They control the inputs smart contracts see, reducing their interaction with the outside world and exposure to its various threats.

Decentralized oracles, like Augur ($REP), are designed to systematically ingest trustless off-chain inputs from multiple parties to verify the results of events, by employing an incentive structure designed to incentivize honest reporting by these parties.

Suggested Reading

Decentralised Oracles: a comprehensive overview by Julien Thevenard

Why Decentralized Oracles Matter by Peter Haymond

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Outline
  • Introduction
  • Suggested Reading