The Oracles: Catalyst for connecting Smart Contracts to the Real World
Smart contracts run algorithmic calculations, store and retrieve data. Nevertheless, every node runs every calculation, it’s simply infeasible to put arbitrary data requests. This issue is efficiently resolved by Oracles, which provide the results of any query to any contract. The core value of blockchain lies in its decentralized nature. On the one hand, the value added from a decentralized application is substantially reduced in case of a single data source. On the other hand, the lack/absence of choice for data extinguishes trust and substitutes it with a compulsory “take it or leave it” attitude. In the meantime, the challenge of devising a scalable method for curating Oracles remains. This obstacle is successfully addressed by ZAP in multiple layers and across various industries, including finance, insurance, real estate, shipping, Dapps.
Smart contracts based on the Ethereum protocol are simple yet efficient code, which is developed to supply guaranteed and automatic management of services in return for certain values being satisfied. Nevertheless, smart contracts cannot access external data, since it is not practical to make arbitrary network requests to access data outside Blockchain. In addition, every node on a chain executes Smart Contracts independently, thus, any request to retrieve information from an external source has to be performed repeatedly and separately by each node. But in case of external data, there is no guarantee that every node will receive the same answer. The source will either change its response in the time given multiple requests from different nodes or become temporarily unavailable. In either case, the consensus is breached and given the fact that smart contracts are derived from on chain data by Ethereum, therefore, the entire Blockchain dies. Fortunately, here comes the oracle and solves this problem.
What is the role of Oracles?
Oracles are trusted third-party validators that transfer data from an external source to smart contracts. They are usually supplied by third parties and are managed by the companies that use them.
Of course, critics will highlight the irony of using third parties to solve an issue on a decentralized platform that boasts of reducing the need for such intermediaries. The essential base of the Smart Contracts and Blockchain debate is the issue of centralization vs. decentralization. Smart Contracts and Blockchain have a decentralized nature, while Oracles or at least most common types of them are not. The latter creates barriers to the widespread adoption of Oracles. Nevertheless, Oracles are an essential step towards the practical implementation of Smart Contracts. The integration of real-world data in Smart Contracts demands reliable Oracles.
Oraclize and ChainLink provide services for linking existing API to the blockchain, but are limited since each of them requires data to be processed through a single aggregator. They are acting as oracles, which rest on their own reputation and the resulting potential for profit loss. Zap’s system includes this model in its set of economic incentives, but only as one of several techniques. Ultimately, Oraclize and ChainLink could be individual oracles on the Zap platform.
Zap’s objective is to be destructive, driving change in a wide range of global industries, including finance, insurance, real estate, and shipping. Zap also finds applications in dynamic new distributed application protocols, providing new monetization opportunities for individuals and emerging economies. Zap is well-positioned to be the premier provider of data for smart contracts and stands to potentially monetize any device linked to the Internet of Things (IoT).
Building a Robust, Source Agnostic Oracle Network
Zap is bringing together the existing wealth of global data with the diverse capabilities of distributed applications by ensuring the secure creation of oracles.
Incentivizing Oracle Creation and Curation
Zap is building a global, decentralized data marketplace and populating it with unique incentivization tools, empowering anyone to begin monetizing their data.
Fueling the Next Generation of Embedded Dapps
Zap is supplying a much-needed fundamental piece of the Ethereum ecosystem and the Web 3.0 paradigm, enabling developers to construct Dapps that simply could not function without it.
On the Zap oracle marketplace, anyone from an individual to large corporations can create oracles access oracles on their own terms. Decentralized application developers will be able to create a new generation of Dapps capable of integrating“ real-world” data.
Regardless of centralization/decentralization of Oracles, the advent of oracles expands the already robust Blockchain technologies. The blockchain network is designed to authorize an emerging business model in which oracles will be paid for what they offer, just as cryptocurrency miners are.