The Blockchain revolution is pushing forward a world of trustless applications. We now can automate business logic in smart contracts and store data in a trustless manner, e.g., on Dash’s decentralized cloud storage. Oracles have become increasingly important in this context because they allow smart contracts to interact with and trust external data. In that sense, oracles are a required connector and essential building block that enable the use of Dash’s decentralized storage in trustless setups. This article explores how Dash Platform can profit from the use of oracles and vice versa.
The importance of decentralized Oracles
Just imagine having a fully automated bank or trading account that doesn’t require a bank or financial institution. This dream is already possible. Decentralized apps (dApps) through smart contracts remove intermediaries, human interaction and significantly increase process efficiency. Storage and oracles are two essential building blocks in such setups as they allow dApps and smart contracts to interact with the outside world by processing and storing information. This can be done through centralized entities or by relying on decentralized sources.
But here is the issue: you don’t want to trust centralized entities that severely limit the true potential of decentralized applications. Instead, you want a proper way to store data decentrally and interact with it as you like. This can be achieved through a smart contract that follows a set of rules and decentralized cloud storage that doesn’t rely on centralized servers. Yet, one piece is missing here, and that is the connection between where the data is stored and how applications execute on that data, or in other words, how the smart contract interacts with external data. Here is where oracles come in.
An oracle is a third-party entity that validates information about the state of the outside world. For example, oracles can report the prices of assets from trusted sources or the winner of a particular sports event. This information may be retrieved or aggregated from a single source using a centralized oracle or multiple trusted sources using a decentralized oracle.
Allowing smart contracts ……………
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Author: Felix Mago
Original link: https://blog.dashincubator.app/2021/01/27/oracles-unlock-new-dash-possibilities.html