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Companies Pushing Smart Contracts for Real-World Adoption

By CIOReview | Tuesday, May 14, 2019

Smart contracts have already changed the way digital agreements are concluded. Established on the Ethereum platform, they remove the intermediary and automatically execute the contracts based on rules. This technology could shake many industries, ranging from finance to healthcare. Although the theoretical proof that blockchain technology and intelligent contracts have a theoretical impact on essentially everything remains stacked, the Oracle problem stands as a severe roadblock to the real use of technology.

Smart contracts optimize transactions when triggering provisions in the real world are fulfilled. Consider, for instance, a case of car insurance. The typical payment process may involve, an accident analysis of the events, the proof of the accident and the absence of foul play, the permission of insurance companies and the transferring of funds to the beneficiary through banks. This involves a number of steps that are necessary and less than necessary that can be done to save the different parties time and resources. When the claim is verified, the automatic transfer of the insured amount to the beneficiary account will end up making it streamlined and convenient for all involved.

When smart contracts operate as part of cryptocurrency, blockchains transactions are approved to ensure complete transparency and no possibility of foul play  through reaching consensus between the participants of the decentralized network. The blockchain network itself provides, therefore, the information which must be sent to the smart contract for the execution of programmed transactions. The hurdle is to broaden this capability to deal with real-world issues when the smart contract information is available. An oracle is a medium which leads from real-world sources to smart contracts. The currently used oracles are centralized, unique sources, with which the provided data can easily be manipulated. There's no known way to combine this aspect with blockchain's decentralized nature and hinder the system's trust aspect.

The oracle problem can be used by businesses to provide Oracle checking services or to find more effective ways to overcome this problem. Even governments can take steps to create very secure and decentralized oracle networks and regulate. Also, businesses make use of blockchain networks by giving oracles services to third-party customers can find ways of generating revenue. Companies offering oracle verification services have already developed new business models and are pushing smart contracts into real-world adoption.

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