What are Oracles in Crypto?

Oracles in Crypto: Blockchains are simply technology that store data usually transactions and they store this data in a group called a block now each block usually has some data before it and hopefully some data after it but all they do is pretty much just store transactions. As already explained in the earlier article.

What is Oracles ?

What Are Oracles In Crypto?
What Are Oracles In Crypto?

The oracle can act as a middleman between the blockchain and the real world also one thing I want to clarify here oracles aren’t real things they’re usually just code programmed by someone and trusted by a lot of people so there is no real physical oracle out there it’s kind of like the internet we can all use it.

History of Oracles

In medieval times an oracle was a person who could use their crystal ball to see into the future essentially giving reliable information to someone who wanted it.

What do Oracles do ?

So you could create a token that follows the price of a united states stock this way investors outside of the united states could actually invest in stocks without needing to have a social security number or report their taxes or any of the other hassles that come when you want to invest in stocks you could use an oracle to create a synthetic token that tracks its price to the real-world price of a stock there are obviously a few other issues that you have to solve with this and it’s very complicated but the mirror protocol has done exactly that you can actually buy a token called m-goog and hold it just as you would the real google stock and the price of them goog token is tracked to the real world google stock price through the chain link.

How we can use Oracle ?

Basically the use of oracle to recreate the traditional way of using insurance that allows us to use a decentralized trustless and probably more affordable method using blockchain technology.

We have presidential elections have you ever seen that website where you can practically gamble on who wins certain elections, I definitely have and it’s a really interesting idea although it could definitely be implemented with blockchain technology and using cryptocurrencies instead of paying with a credit card, then voting and then waiting for the poll to happen and trusting the platform that will actually reward you. If you won, we could simply write all of this with code and host it right on ethereum. This way we could pay with ethereum or usdc wait to see who won and then let our trusted decentralized oracle do the work of paying out. The winners speaking of decentralized oracles one of the benefits is that we don’t have to trust one data source.

Types of Oracles

There are different types of oracles and these different types usually specialize in one of three categories:

1. Hardware oracles

It read information from real-world sensors like a thermometer or a weighing scale or even if an nfc tag can be found.

2. Software oracles

It finds information on the web like stock market data or how many users are on a website.

3. Human oracles

It consolidates human data like reviews or important ideas from people with specialized skills or knowledge.

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