Applications "Oracles" or how to become a useful smart contract

“Oracles are an important part of the Ethereum intellectual contract ecosystem and are crucial for the implementation of many applications. We hope that more and more interesting digital applications using the information from such services will appear. ”
- Vitalik Buterin, founder of Ethereum

Many believe that smart contracts are a new wave of innovation for business and law, which can serve as material for the construction of the next chapter of the Internet.
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In order to quickly get the first idea about the benefits of oracles, how they work, and how they supply information, I will show you some living examples.

Smart contracts can be useful in completely different industries: from financial services and the insurance industry to logistics and IoT smart sensors. Smart contract platforms such as Ethereum and Bitcoin have limited access to information from the outside world, and oracles are designed to fill this gap by providing smart contracts with data from the outside world in the form they need.

Let's take an unmanned vehicle. At this stage of development, using a smart contract, it would be possible, for example, to determine who actually controlled the car and at what point. Did the driver control it or did the car work automatically? An oracle could receive information from the sensors of a car and deliver it to the blockchain, keeping it unchanged.

The types of data and sources that oracles work with can vary greatly, from data from a thermostat in your house or stock market prices to your heartbeat. Oracle takes data and formats it so that third-party blockchain applications can use it.

But one of the living examples - the company 21Inc and their latest project sensor21 . Anyone who has $ 5 can buy and put in his computer a tiny Raspberry Pi sensor for measuring air pressure, altitude, temperature. The oracle application transmits this data to the created 21Inc. Marketplace and sells 20 Satoshi per request. Or, for example, the BNC portal (BraveNewCoin) , which launched 14 public oracles completely free of charge, offering information with daily price quotes for major digital assets. Oracles that provide financial data can be useful for many applications, from crypto-protection programs and new crypto-wallets, to trading bots and other decentralized applications.


Tokenized assets created by oracles, for example, securities, have great prospects and can replace current financial instruments, as they
They have wider automation tools and protection against unauthorized access and allow much easier access to transactions with this asset.

To simplify the processes, special services are already being developed. One of them is SmartContract . SmartContract CEO Sergey Nazarov said that the oracles created on their platform are very well tuned, keep confidentiality and scale. SmartContract offers the ability to add legal documents to contracts that interact with these oracles. Consent and digital signature in a legal document can be a condition for the execution of a smart contract.

So far, three large forms of such interactions have appeared on the horizon: oracles that preserve the results of events, markets for forecasts and the sale of private data.

As the blockchain economy grows, the oracle ecosystem will grow rapidly, providing links between the digital and physical worlds. And today, those who can accurately provide information for the digital economy have the opportunity to participate in the division of future profits.