How easily a blockchain network can intake off-chain data and process is a deciding factor for blockchain mass adoption. Without the ability to communicate with the outer world and feed real-world data and information into its infrastructure, blockchains are limited to a countable few use cases.
To get past that hurdle, a blockchain needs a third-party or an integrated oracle to translate any form of outside data into information that blockchains and blockchain-based systems can process. Oracles also help communicate events happening on-chain to entities that exist in the real world. In doing so, oracles increase the potential use-cases of blockchain multi-folds.
In using oracles, however, we risk the integrity of the blockchain system by relying on a third party. This means that the information a blockchain records can be fake or altered if third-party oracle nodes tamper with the data.
To solve this, Alacrity blockchain comes with an integrated oracle—Alacrity Integrated Oracle—that bridges the gap between on-chain and off-chain data without relying on a third party.
Let’s take a look at the use-cases of Alacrity Integrated Oracle.
Using smart contracts
The inception of blockchain gave life to the concept of smart contracts. And oracles catalysed the implementation of both.
Blockchain-based smart contracts rely heavily on data received from outside sources, but they themselves cannot understand real-world changes to initiate a predefined action. For example, a smart contract designed to buy and sell stocks based on price movements and values of technical indicators cannot read market data on their own. So, when we integrate an oracle to a blockchain, it helps the smart contracts understand the parameters and execute a market order.
Similar is the case for smart contracts used in supply chain management, conditional payments, online gambling, and so on. Oracles read the actual information and then feed the translated version to the smart contract for assessment and action.
Integrating IoT and blockchain
IoT and blockchain are two of the fastest-growing industries in the technology landscape. By using the Alacrity Integrated Oracle, developers can create decentralised applications (DApps) on the blockchain that are capable of interacting with information recorded by IoT devices.
Alacrity Integrated Oracle is also universal, so developers can request data from APIs or IoT sources of their choice.
Securing off-chain data
The benefit of centralised storage servers is they can easily store huge amounts of data. The same is not true for decentralised servers like a blockchain. They are only efficient with small chunks of data, say a few megabytes. But blockchains, due to the absence of a central server, are far more secure than centralised storage systems. No central entity exercises control over the data owned by other people, which is the opposite when we speak of cloud storage such as that of Google or Amazon.
By using oracles like the Alacrity Integrated Oracle, it is possible to translate huge chunks of data into blockchain-specific information and then store the encrypted version of it in the blockchain. The data thus becomes immutable.
Blockchain oracles are a key component for driving mainstream blockchain adoption. And an integrated oracle like the one developed by Alacrity lays a stronger foundation for trust in blockchain oracles by freeing it of third-party involvement.
With its immense potential to help use blockchain technology across almost any industry, Alacrity Integrated Oracles can bring widespread adoption of blockchain.