Scalability and interoperability—two of the biggest challenges that the blockchain community is presently facing. In a broader context, these are also among the greatest hindrances to large scale mainstream adoption of this emerging technology. Consequently, there have been significant efforts among innovators, developers, and almost every other stakeholder in this domain to conceive of viable solutions to these problems. And in fact, there have been several positive or at least promising outcomes already.
With Ethereum’s advent in 2015, smart contracts have become a reality, widening the scope for interoperable, blockchain-based solutions through dApps. In doing so, the platform has become one of the pillars of a truly decentralized world that extends much beyond P2P finance. Taking a cue, innovators such as RSK have further diversified the space by bringing smart contracts onto the Bitcoin blockchain.
In essence, smart contracts have emerged as a cornerstone of decentralized ecosystems. After all, it is ultimately the smart contracts that actually replace the “trusted intermediaries” of centralized systems. However, despite their significance, smart contracts have certain limitations in and of themselves. The most pertinent among these is the need for reliable data inputs as triggers which often have to come from off-chain sources if the full potential is to be realized.
Over time, off-chain interactions have become a classic problem for the blockchain community to which oracles have emerged as a solution. In turn, they also represent a way of imparting the much-needed scalability and interoperability for blockchains and other decentralized ecosystems. In essence, oracles work much in the same way as their namesake from ancient Greece. Having said that, this guide takes a deep dive into oracles, outlining in the process RSK’s approach to the messengers of the blockchain world.What is an Oracle?