Because smart contract blockchains execute their code based off of user-defined inputs, to unlock the full potential of blockchain, there must be a source of information not inherently present on a computer.
This other data must come from somewhere, and oracles bridge the gap. These oracles should be decentralized to an extent where the information can be reliable and not controlled too tightly by a central authority, to ensure full reliability of the data.
The providers of truth and timely information are rewarded. Purveyors of dishonesty and delay are punished. Oracles within blockchain play a crucial role in streamlining and disrupting industries like insurance, invoicing, gambling, supply chain sector and a truly limitless number of other data-driven operations.
Without the injection of true, verifiable, and real-world information being supplied by a large number of possible sources, blockchains would be slow, expensive, and largely useless.
Bring in the oracles.
The Major Combatants
Chainlink
Chainlink is probably the widest known oracle platform, and has been around since 2017. Its parent company SmartContract.com was founded 2014 in order to bridge the gap between private data sources and public blockchains.
Chainlink has created tremendous amounts of progress through partnerships, agreements, and working relationships. A few notable relationships are with companies like: Google Cloud, Oracle, Binance, and too many others to count. It has a tremendous following and a loyal following and community of internet frogs behind it. Above all else, it is designed to be blockchain agnostic so easy implementation and interoperability are two of its many strengths.
The founder Sergey Nazarov, owner of smartcontract.com, has been in blockchain development for the better part of the decade, and founded Chainlink in 2017.
Band Protocol
Band is another highly recognized oracle on a relatively short list of oracle and data providers. Band protocol is an oracle that originally launched as an ERC-20 token on the Ethereum network, but has since migrated to the Cosmos ecosystem.
Like Chainlink, Band provides data with scalability in much the same way that Chainlink does, but was founded years after in 2019. Band claims to be much more interoperable and less expensive than its competitor, with active operations on Tron, ICON, and Waves, as well as the claim to being more decentralized.
With a steadily growing fan-base, and a shrinking development gap, Band looks as though it has every capability of staying strong as a provider for independent and decentralized data feeds to corporate and blockchain customers.
Final Thoughts
Winner: Chainlink (for now)
The development team is second to none, the founder has been integral to blockchain for ages, and despite its expense, Chainlink provides a reliable source of data.
The reality is there is vast territory for growth; even these oracles may not at present have the capability of meeting the demands of future markets.
Also worth mentioning is Polkadot’s integrated oracles, which will certainly assist with scalability of data providers, possibly cannibalizing some of the lesser providers as DOT seed more integrations.
Which oracle you think will be winning in 10 years and how will the current outlook change?
For more information on skills to develop as a blockchain initiate, check out our recent article: “4 Skills for Blockchain Initiates”.
