What Blockchain Needs Right Now: Part Two – Oracles

Missing Links

This is the second part of our article series on the upgrades required to make blockchain technology ready to deliver on all we have been promised these recent years. In part one, we looked at scalability, which is arguably the most pressing issue if we want cryptocurrencies to be of any use as a daily payment system and for many other blockchain applications.

In this second part, we will look at the need for blockchains to interface with the rest of the world through reliable oracles.

Data feeds
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Blockchains Don’t Trust Outsiders

Blockchains are not very good at interfacing with external data providers. Despite all the talk about the Internet of Things and data-intensive AI application, it is very difficult to get a blockchain-based smart contract to work with external data feeds.

Let’s say your smart contract requires information about the price of a cryptocurrency or the weather in a location. The only way to do this is via an external transaction, sending this information to the blockchain. However, there are a number of problems associated with this. First of all, we need to push this data to the smart contract. It is much harder for a smart contract to pull this data by itself. In fact, a smart contract on a platform such as Ethereum cannot simply call an external API. Secondly, if we do manage to request external data, we are leaving the decentralized world and lose all the data integrity and source verification properties of the blockchain. How can we trust this centralized feed of external data? Is this way of working not just like going back to the old days of centralization?

Oracles

In blockchain terminology providers of external data feeds are called Oracles. Providers, such as Oraclize take away the complexity of interfacing with external data sources by providing a smart contract interface. A contract can send a query and request to receive the result through a future transaction call.

This works very well in terms of getting the actual data into the blockchain conveniently but does not resolve any of the trust issues. How can we make sure the data has not been compromised off-chain?

Making Oracles Safe

Centralized data feeds introduce the exact same problem the blockchain was meant to solve, namely trust. To solve this issue, some approaches that have been suggested use alternative off-chain trusted computing models, such as TLSNotary proofs. Special purpose hardware solutions, for example, Intel’s Software Guard Extensions can be used in combination, providing an extra level of security.

However, these techniques make sure that the data has not been compromised and come from the correct source. How can we trust the data source itself? The answer is we should not trust a single source. A viable approach could be to use a network of oracles for multiple sources and use an incentive mechanism to encourage oracles to tell the truth. The Chainlink Oracle service works in such way.

Putting it Together

Imagine we have solved the scalability issue introduced in part one of this series and have found a way to reliably use external data. Now we need a number of tools to make use of this exciting new blockchain in innovative ways. In the third and final part of this series, we will look at cryptoeconomic primitives and how they can provide a new digital economy.

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Dr. Stefan Beyer
Dr. Stefan Beyer is editor-at-large at BlockTelegraph and a Blockchain consultant and smart contract auditor. He graduated from the University of Manchester in 2001 with a degree in Computer Science and obtained a Ph.D. in 2004 from the same university with the title “Dynamic Configuration of Embedded Operating Systems”. Since then he has worked in computer science research in distributed systems, fault tolerance, ubiquitous computing and cyber security. He is currently working as head of research and development for a medium-sized cyber security company in Spain.

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New App Challenge Will Give You Crypto Tokens for Exercising

Wing leadership gets in shape

The 100 Squats Challenge by OliveX and Lympo is offering to distribute Lympo tokens to all fitness fans who take part in their 30-day challenge. This program promises to bring together the crypto tech that will appeal to so many blockchain devotees and fitness enthusiasts who never shy away from a challenge.

The 100 Squats Challenge is a simple premise backed up by fantastic delivery. After a simple download of the iOS app 100 Squats Challenge (an Android version is not available at this time), a user can kick off a new fitness challenge, coupled with technology like never before. The app devised following an agreement by Animoca Brands’ subsidiary OliveX and Lympo will then see tokens distributed with milestones completed.

#SquatGoals

Making use of the mobile device’s camera, the Challenge is led by in-house personal fitness trainer Kat. The app doesn’t just offer instructional videos to ensure good form while performing the squats. There is also the option to see your video side-by-side with other users, allowing you to challenge your friends and win bragging rights as the reigning squat champion.

While the 100 Squats Challenge app is a nifty piece of software, it’s also one that enjoys strong backing at its creators, with Antanas Guoga, the head of Lympo’s Blockchain having personally invested in Animoca Brands’ recent capital raise. So too does the release of the app see Animoca Brands’ driving forward a strong campaign with the claim it’s produced the first ever “squat to earn cryptocurrency” challenge.

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Image credit: Lympo

OliveX Branching Out

While this claim will make waves in the fitness world, OliveX has form in this field.  A subsidiary of Animoca Brands announced earlier this year, is already developing and publishing numerous mobile apps, including apps powered by artificial intelligence (AI). The leveraging of gamification to improve the fitness and health of users is a common theme throughout their catalog.

While blockchain and fitness fans most certainly do not come from mutually exclusive camps, undoubtedly the 100 Squats Challenge is also a greater campaign for reasons beyond the 30-day goal alone. For all the abundance of opportunity emerging tech like blockchain promises, it is amazing to witness the grand scope of possibility inherent in the technology.

A Healthy Blockchain Community

Blockchain’s future in the field of healthcare is well-represented. Developments in this field will often emphasize blockchain tech’s power in areas of medical treatment and institutions like doctor’s offices and hospitals, with not much focus at the scale of the individual consumer.

Institutional scale use-cases are by all means revolutionary but the value of blockchain is also immense regarding the maintenance of general health and wellbeing. This is another reason why the 100 Squats Challenge is so terrific. It’s not only for what it offers now but also for what it promises for the future — another representation of the transformative capacity blockchain and crypto offers to the fitness sector and fitness enthusiasts on a one-to-one level.

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EU Blockchain Observatory and Forum Releases Blockchain Innovation Report

european flag

The European Union has been taken a proactive role in blockchain technology for a while now. Earlier this year it launched the European Blockchain Observatory and Forum. This body set up through a tender process by the European Commission to “ …promote blockchain in Europe by mapping existing blockchain initiatives, analyzing and reporting on important blockchain themes, promoting blockchain education and knowledge sharing and holding events to promote debate and discussion.”

The observatory is run by the well-known blockchain company Consensys and just published one of its first major deliverables. The report titled “Blockchain Innovation in Europe” looks at the current blockchain landscape, lists key challenges, and outlines a list of emerging priorities.

As a member of the EU Blockchain Observatory’s “Blockchain Policy and Framework Conditions Working Group”, the author of this article has been involved in the processes leading to the publication of this report.

EU Blockchain Interest

However, the EU Blockchain Observatory and Forum’s opinion is relevant, as it has been set up by the European Commission in a way that ensures all relevant stakeholders have a voice. The very practical process is not run by European civil servants but an experienced blockchain company. Consensys has been selected in a competitive process to lead the observatory. Potential critics would be hard pressed to find a company with more expertise in blockchain related subjects.

The editing process of reports is an open process in which anyone can participate. Input is provided by academic and industry experts, members of the observatories two working groups, the observatory secretariat and participants of public workshops organized.

In the workshop held in Vienna last May, leading to the preparation of the now released report (see video), academics from a variety of fields, blockchain startups, large consulting firms, such as Accenture, banks, such as BBVA and Barclays and many more exchanged ideas. Even major blockchain platforms, such as NEM and IOTA participated.

Including all these players in what essentially amounts to policy recommendations is an important first step to sensible policy definition and regulatory clarity for blockchain technology.

European Priorities

Whilst the report provides some interesting insights into the key challenges and opportunities and includes details on the social challenges of decentralization, we will not go into detail about the whole report. Instead, we will focus directly on the priorities for blockchain in the European Union that are listed as a conclusion of the report:

  1. The need to clarify the legal and regulatory framework. Potential conflict with the recently enacted General Data Protection Regulation (GDPR) is highlighted.
  2. Focus on education and research.
  3. Europe should drive adoption of blockchain technology in the public and private sector.
  4. Promote collaboration in the blockchain space. Identity management, in particular, is singled out as a great opportunity that depends on pan-European collaboration.
  5. Foster blockchain innovation by studying the ecosystem and providing data on growth and condition.

An Important Step

Of course, nothing in this report and the ones to be released in future by the EU Blockchain Observatory and Forum can be interpreted as policy. However, the mere fact that the EU has opted to conduct this exercise and the investment related is a sign that European legislators look favorable upon blockchain technology and are willing to see it as an opportunity, rather than a threat.

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