Achieving two-way interoperability between blockchains and the real world is an ongoing challenge. It is not something that can be done natively, yet with the help of blockchain oracles, a lot can be achieved.
What are Blockchain Oracles?
To explain the purpose of a blockchain oracle, one needs to be aware of what it entails exactly. A blockchain – or its smart contracts – cannot access data from outside of its network. Unless information is manually introduced to the blockchain system, that is.
For smart contracts, that can be a hindrance. These contracts are designed to automate processes by leveraging blockchain technology. However, not being able to access information from the outside world, even though it is relative to the contractual agreement, is something that needs to be resolved and that’s the exact purpose of blockchain oracles.
With the introduction of oracles, smart contracts can be granted access to external information. Obtaining the data is done through either big data applications, or hardware-based networks such as the Internet of Things (IOT). Data gathered can span many different topics, including the weather, payments, price fluctuations, and so forth.
Different types of oracles can be identified, all of which pertain to different aspects. Examples include software oracles -capable of processing data from online sources – and outbound oracles – granting smart contracts the option to send data to the outside world.
Challenges remain when exploring blockchain oracles. The outside source of information needs to be trusted at all times. Additionally, oracles are – by design – not subjected to the same security mechanisms and standards found in the blockchain protocol they are assigned to. Circumventing this aspect requires strong second layer implementations, although there is still a lot of work to be done.
Introducing RIF Gateways
One option to explore blockchain oracles comes in the form of RIF Gateways, a set of interoperability protocols designed to provide tamper-proof and secure interaction with the external world. All of this is done through a versatile interface layer that unifies the concepts of cross-chain integrations and access to oracle services.
For blockchains exploring RIF Gateways, there is one core benefit. This set of protocols ensures there is an implementation-agnostic approach. In terms of interoperability and communication with other networks and the outside world, that aspect should never be overlooked. It is also worth noting that this applies to both internal and external data consumption.
By leveraging the most-recent developments in the blockchain-based data industry, RIF Gateways will provide access to industry solutions and standards. All of this is achieved without sacrificing the user aspect.
More specifically, a unified API will help lower the barriers to entry for implementing these new technologies. Bridging the gap between blockchains is crucial in terms of future global development, thus solutions such as RIF Gateways will likely be in high demand. RIF Gateways is part of RIF OS, a third layer based on RSK’s technology. RSK is a smart contract platform that enables coders to easily create, import and deploy smart contracts on top of Bitcoin.
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