Read on Twitter
1/24) #Oracles, a thread
First, I am not an expert at all, plz DYOR
I tried to write down information about Oracles as simple as possible.
In this thread:
-What are Oracles
-The Oracle problem
-Why invest in them?
-Examples & charts
-My predictions (FWIW
)
Letâs go!
First, I am not an expert at all, plz DYOR
I tried to write down information about Oracles as simple as possible.
In this thread:
-What are Oracles
-The Oracle problem
-Why invest in them?
-Examples & charts
-My predictions (FWIW
)Letâs go!
2/24) Fancy name, but what is an #oracle?
A third party service that serves a Smart Contract with information from outside the Blockchain.
For a lot of contractual agreements that is vital, because otherwise it can only get data from inside itâs own network/blockchain.
A third party service that serves a Smart Contract with information from outside the Blockchain.
For a lot of contractual agreements that is vital, because otherwise it can only get data from inside itâs own network/blockchain.
3/24) Blockchains and Smart contracts on itâs own cannot connect to off chain data.
An Oracle could be described as a bridge between on chain and off chain data. So it is not the source itself, but like a second layer that requests, verifies and authenticates information.
An Oracle could be described as a bridge between on chain and off chain data. So it is not the source itself, but like a second layer that requests, verifies and authenticates information.
4/24) A Smart Contract seems like something big, but there are also loads of smaller âcontractsâ.
Some examples of data from outside the blockchain: extern transactions, temperature measured by a sensor, price information, elections.
There are many different oracles.
Some examples of data from outside the blockchain: extern transactions, temperature measured by a sensor, price information, elections.
There are many different oracles.
5/25) An example:
Letâs say, Peter and Roger like to bet against eachother. To make it fully transparent, they create a Smart Contract fort heir bet.
El Clasico: Peter says Real Madrid wins, Roger bets Barcelona winsâŠ.
Letâs say, Peter and Roger like to bet against eachother. To make it fully transparent, they create a Smart Contract fort heir bet.
El Clasico: Peter says Real Madrid wins, Roger bets Barcelona winsâŠ.
6/24) A few days later, Barcelona beats Real Madrid with 2-1. Roger wins.
Now we need the oracle to provide the Smart Contract, through a trusted API, the result of the game. After that, the contract sends the money from that bet to Roger.
Roger that.
Now we need the oracle to provide the Smart Contract, through a trusted API, the result of the game. After that, the contract sends the money from that bet to Roger.
Roger that.
7/24) As you can see, an #Oracle is actually a kind of an independent intermediary that provides the smart contract on the blockchain with the data it needs.
Without the need of a partial person.
Without the need of a partial person.
8/24) There are many different kind of oracles
An oracle can be classified depending (many are a mix) on a number of qualities:
Source: Software/hardware
Direction: Incoming or outgoing
Trust: Centralised/decentralised
Letâs dive into it a bit more
An oracle can be classified depending (many are a mix) on a number of qualities:
Source: Software/hardware
Direction: Incoming or outgoing
Trust: Centralised/decentralised
Letâs dive into it a bit more
9/24) Software- Oracles
These types can work with any web-based data source. I.e.: information from online databases, servers, websites.
Most of the oracles occure in this space
These types can work with any web-based data source. I.e.: information from online databases, servers, websites.
Most of the oracles occure in this space
10/24) Hardware-Oracles
Sometimes a Smart contract needs information from âThe Offline Worldâ.
I.e. a truck that passes a sensor at a loading dock. This information can then be sent tot he smart contract via the oracle and the next step can be taken.
Sometimes a Smart contract needs information from âThe Offline Worldâ.
I.e. a truck that passes a sensor at a loading dock. This information can then be sent tot he smart contract via the oracle and the next step can be taken.
11) Incoming&outgoing
Sending information from Smart Contract to extern sources&vise versa.
The amount of cheese at a supermarket stock gets below a certain point. Sensor goes off, information is send through the oracle to the smart contract. New cheese getâs instantly ordered
Sending information from Smart Contract to extern sources&vise versa.
The amount of cheese at a supermarket stock gets below a certain point. Sensor goes off, information is send through the oracle to the smart contract. New cheese getâs instantly ordered
12/24) Centralized Oracles
We all like the decentralised part of crypto, right?
A centralized oracle is controlled by a single entity and that is risky. The entity can have bad intentions.
Not my cup of tea.
We all like the decentralised part of crypto, right?
A centralized oracle is controlled by a single entity and that is risky. The entity can have bad intentions.
Not my cup of tea.
13/24) Decentralized oracles
Hah! Better.
The reliability of this group of oracles is greater than the centralized ones, because they use multiple sources.
The smart contract requires multiple oracles to verify or confirm data.
Hah! Better.
The reliability of this group of oracles is greater than the centralized ones, because they use multiple sources.
The smart contract requires multiple oracles to verify or confirm data.
14/24) The Oracle Problem
A smart contract that needs information from outside, relies on an oracle. But an oracle isnât part of the blockchain, and therefore is not covered by the security meganism.
A smart contract that needs information from outside, relies on an oracle. But an oracle isnât part of the blockchain, and therefore is not covered by the security meganism.
15/24) So that is still a problem that has to be fixed. But, given all the developments in the (Oracle & #DeFi) space, I think that problem will be solved at some point. A lot of oracles have already fine solutions
TL;DR 1-15: I am #Bullish on Oracles
TL;DR 1-15: I am #Bullish on Oracles
16/24) So why do I think that investing a certain part of your allocations into them is a good strategy?
First of all, this is just my opinion/approach and that doesnât mean sh*t. Plz DYOR
I like to have a diversificated portfolio and I do think Oracles must be a part of it.
First of all, this is just my opinion/approach and that doesnât mean sh*t. Plz DYOR
I like to have a diversificated portfolio and I do think Oracles must be a part of it.
17/24) Coming tot he point, a blockchain or a smart contract at itâs own doesnât mean that much.
As you saw in the examples given, oracles are a bridge for smart contracts/blockchains and âthe real worldâ.
It can be a part of the solution to mass adoption of our space, imho.
As you saw in the examples given, oracles are a bridge for smart contracts/blockchains and âthe real worldâ.
It can be a part of the solution to mass adoption of our space, imho.
18/24) Example one: Ofcourse, #Chainlink
$Link is THE leading data oracles network and I think i twill stay that way fort he coming years. There will come competitors, but I think #Link will keep on leading the others. https://chain.link/
$Link is THE leading data oracles network and I think i twill stay that way fort he coming years. There will come competitors, but I think #Link will keep on leading the others. https://chain.link/
20/24) Example two: $Dia
#Dia (Decentralised Information Asset) is a platform, open source, where other oracles for #DeFi applications can build on. Those oracles are verified by the community.
More details: https://docs.diadata.org/ and https://token.diadata.org/
#Dia (Decentralised Information Asset) is a platform, open source, where other oracles for #DeFi applications can build on. Those oracles are verified by the community.
More details: https://docs.diadata.org/ and https://token.diadata.org/
21/24) $Dia, chart
I see a clean accumulation range, with HLâs and HHâs. When we really leave this, #Dia is going to start it first real cycle in the coming year(s).
I see a clean accumulation range, with HLâs and HHâs. When we really leave this, #Dia is going to start it first real cycle in the coming year(s).
22/24) I do also own among other things $Band and $Trb
This chart is long enough already, so suit yourself for more info
https://bandprotocol.com/
https://tellor.io/
Added a chart of #Band, lining up very very nice.
This chart is long enough already, so suit yourself for more info
https://bandprotocol.com/
https://tellor.io/
Added a chart of #Band, lining up very very nice.
23/24) So, letâs talk numbers now. Keep in mind anyones prediction means in fact absolutely nothing, but I think it is nice to look back at it after the bull
Peak bull market predictions (6m-3y):
$Link: $200-$300
$Dia: $50+
$Band: $150-$200
$Trb: $260+
Crazy? mania targets
Peak bull market predictions (6m-3y):
$Link: $200-$300
$Dia: $50+
$Band: $150-$200
$Trb: $260+
Crazy? mania targets
24) TL;DR I am very #Bullish on fa good oracles fort he years to come, because I think they are really a bridge between Blockchains and âThe real worldâ
So, what do you think? And what is your favorite oracle?
If this thread was of value, please retweet it
Much appreciated!
So, what do you think? And what is your favorite oracle?
If this thread was of value, please retweet it
Much appreciated!
