What is the Flux protocol for and what are Blockchain oracles?
Flux is a cross-chain oracle aggregator that provides smart contracts with access to economically secure data feeds on anything. Well, what are oracles and why Flux protocol is it so important?
Bitcoin and Ethereum blockchains do not have open access to information outside their own networks, and therefore there is no direct way to verify the conditions on which smart contracts are based. Oracle works as a translator of information; it is a third party providing data.
Oracles provide the necessary data to execute smart contracts. These fulfillment conditions can be any: temperature, payment completion, price change, etc. At the moment, this is the only way for smart contracts to interact with information outside the blockchain environment.
The Benefits of Blockchain Oracles
Oracles are fundamentally important for the blockchain space, because smart contracts cannot function without an external data source. Without access to information, the possibilities of using smart contracts are reduced to a tiny part of their potential.
However, with the oracle system, smart contracts are implemented into real-life applications hypothetically in any area. After the data gets to the blockchain, the information can be used to fulfill the terms of contracts and create precedents that can subsequently make a revolution in different sectors of the economy.
Why can’t decentralized applications communicate with the real world without oracles?
These are fundamentally different formats. Blockchain is a deterministic technology that displays a certain series of events that occur one after another in a sequential order − a series of transactions. To access information outside the chain, data points that are not sequential will be required, and therefore the blockchain is useless in this situation.
However, the world outside the network is not deterministic, there are no records of events in a specific sequence, which in turn creates problems with transparency. Data points can be generated at any time, making it difficult to contact the blockchain.
This fundamental difference makes two different worlds absolutely incompatible with each other by default, and only an oracle can make two-way communication between them possible.
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