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Blockchain oracles


Blockchain oracle
Blockchain oracle

Blockchain oracles are third-party systems that provide external data to smart contracts on a blockchain network. Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. These contracts are stored and replicated on a blockchain network. However, smart contracts on their own are not able to access data from external sources. This is where blockchain oracles come in.


Oracles provide a way for smart contracts to access external data and trigger actions based on that data. For example, a smart contract could be set up to release funds to a supplier when a shipment of goods is delivered. An oracle could be used to verify the delivery of the goods by accessing tracking information from the shipping company's website.


Oracles can be classified into two types:

  1. Software oracles. These are programs that are designed to fetch data from external sources and provide it to the smart contract.

  2. Human oracles. These are individuals who provide data to the smart contract, often through a decentralized platform.

Oracles have the potential to be used in a wide range of applications, including supply chain management, financial transactions, and prediction markets. Here are a few examples of oracles and how they can be used:

  • Weather oracles: These oracles can provide data on weather conditions to a smart contract. For example, a smart contract could be set up to automatically pay out insurance claims to policyholders in the event of a natural disaster, such as a hurricane. The weather oracle would provide data on the location and severity of the hurricane to the smart contract, which would then release the insurance funds to the policyholders.

  • Financial oracles: These oracles can provide real-time data on financial markets to a smart contract. For example, a smart contract could be set up to automatically execute trades on a stock exchange based on market conditions. The financial oracle would provide data on the current price of the stock, and the smart contract would execute the trade based on predetermined rules.

  • Social media oracles: These oracles can provide data from social media platforms, such as Twitter, to a smart contract. For example, a smart contract could be set up to automatically purchase advertising space on a website based on the popularity of a certain hashtag on Twitter. The social media oracle would provide data on the number of times the hashtag has been used, and the smart contract would execute the purchase of the advertising space.

  • GPS oracles: These oracles can provide data on the location of a device to a smart contract. For example, a smart contract could be set up to automatically unlock a car rental when the renter arrives at the location of the car. The GPS oracle would provide data on the location of the renter's device, and the smart contract would unlock the car when the device is within a certain distance of the car.

Some examples of organizations that have implemented oracles include:

  • Supply chain management: Oracles can be used to provide real-time data on the location and condition of goods as they move through the supply chain. For example, a shipping company could use an oracle to provide data on the location of a container, the temperature inside the container, and the condition of the goods inside the container.

  • Financial services: Oracles can be used to provide real-time data on financial markets and automate financial transactions. For example, a stock exchange could use an oracle to provide data on the current price of a stock, and a smart contract could be set up to automatically execute trades based on predetermined rules.

  • Insurance: Oracles can be used to automate the claims process in the insurance industry. For example, an insurance company could use an oracle to provide data on the location and severity of a natural disaster, and a smart contract could be set up to automatically pay out claims to policyholders in the affected area.

  • Real estate: Oracles can be used to automate the process of buying and selling real estate. For example, a smart contract could be set up to automatically transfer ownership of a property from the seller to the buyer when all of the terms of the sale have been met. An oracle could be used to verify that the terms have been met and to trigger the transfer of ownership.

These are just a few examples of the many organizations that have implemented oracles. Oracles have the potential to be used in a wide range of industries and applications.


It is important to note that the security and reliability of oracles are a critical concern, as the accuracy and integrity of the data they provide can have significant consequences. For example, if an oracle provides incorrect data to a smart contract, it could result in the wrong parties receiving funds or other assets. To address this, some organizations have implemented multiple oracles to provide redundant sources of data and increase the overall reliability of the system.


It is difficult to predict the exact future of oracles, as the technology is still in its early stages and is subject to rapid change. However, it is clear that oracles have the potential to revolutionize the way that smart contracts are used and could potentially be used in a wide range of industries and applications.


One potential direction for the future of oracles is the development of decentralized oracle networks. These networks would allow multiple oracles to provide data to a smart contract, increasing the reliability and security of the system. Decentralized oracle networks could also help to reduce the cost of using oracles, as the cost would be distributed among multiple parties rather than being borne by a single entity.


Another potential direction for the future of oracles is the integration of artificial intelligence (AI) and machine learning (ML). Oracles could be used to provide data from sensors and other sources to smart contracts, and AI and ML could be used to analyze and interpret this data. This could allow smart contracts to make more complex decisions and to adapt to changing conditions.


Overall, the future of oracles is likely to be shaped by the needs and demands of users and the continuing development of the underlying technology. It is an exciting time for the field, and it will be interesting to see how oracles are used in the coming years.

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