Blockchain Oracles: Difference between revisions
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Oracles feed the smart contract with external information that can trigger prede ned actions of the smart contract. This external data stems either from so ware (Big-data application) or hardware (Internet-of-Things). Such a condition could be any data, like weather temperature, successful payment, or price fluctuations. However, it is important to note that a smart contract does not wait for the data from an outside source to ow into the system. The contract has to be invoked, which means that one has to spend net- work resources for calling data from the outside world. This induces network trans- action costs. In the case of Ethereum, this would be “gas.” | Oracles feed the smart contract with external information that can trigger prede ned actions of the smart contract. This external data stems either from so ware (Big-data application) or hardware (Internet-of-Things). Such a condition could be any data, like weather temperature, successful payment, or price fluctuations. However, it is important to note that a smart contract does not wait for the data from an outside source to ow into the system. The contract has to be invoked, which means that one has to spend net- work resources for calling data from the outside world. This induces network trans- action costs. In the case of Ethereum, this would be “gas.” | ||
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The main challenge with oracles is that people need to trust these outside sources of information, whether they come from a website or a sensor. Since oracles are third-party services that are not part of the blockchain consensus mecha- nism, they are not subject to the underlying security mechanisms that this public infrastructure provides. One could replicate “man-in-the-middle attacks” standing between contracts and oracles. # | |||
The robustness assurance of this “second layer” is of utmost importance. Different trusted computing techniques can be used as a way of solving these issues. However, this topic will need more attention, as secure oracles are a bottleneck for smart contract security. If oracle security is not adequately provided, it will be a show stopper for widespread smart contract im- plementation. | |||
(https://blockchainhub.net/blockchain-oracles/) | (https://blockchainhub.net/blockchain-oracles/) | ||
=Source= | |||
* Book: Token Economy, by Shermin Voshmgir, 2019 | |||
[[Category:Cryptoledger Applications]] | [[Category:Cryptoledger Applications]] | ||
Revision as of 06:09, 2 August 2019
Description
by Shermin Voshmgir:
"Blockchains and smart contracts cannot access data from outside of their network. In order to know what to do, a smart contract often needs access to in- formation from the outside world that is relevant to the contractual agreement, in the form of electronic data, also referred to as oracles. These oracles are services that send and verify real world occurrences and submit this information to smart contracts, triggering state changes on the blockchain.
Oracles feed the smart contract with external information that can trigger prede ned actions of the smart contract. This external data stems either from so ware (Big-data application) or hardware (Internet-of-Things). Such a condition could be any data, like weather temperature, successful payment, or price fluctuations. However, it is important to note that a smart contract does not wait for the data from an outside source to ow into the system. The contract has to be invoked, which means that one has to spend net- work resources for calling data from the outside world. This induces network trans- action costs. In the case of Ethereum, this would be “gas.”
...
The main challenge with oracles is that people need to trust these outside sources of information, whether they come from a website or a sensor. Since oracles are third-party services that are not part of the blockchain consensus mecha- nism, they are not subject to the underlying security mechanisms that this public infrastructure provides. One could replicate “man-in-the-middle attacks” standing between contracts and oracles. #
The robustness assurance of this “second layer” is of utmost importance. Different trusted computing techniques can be used as a way of solving these issues. However, this topic will need more attention, as secure oracles are a bottleneck for smart contract security. If oracle security is not adequately provided, it will be a show stopper for widespread smart contract im- plementation. (https://blockchainhub.net/blockchain-oracles/)
Source
- Book: Token Economy, by Shermin Voshmgir, 2019