Opening up Smart contracts: An Intro to Blockchain Oracles

Although most blockchains have native cryptocurrencies (tokens) that enable governance, and smart contracts can be built on top of them for further implementation of protocols and additional transfer of value within the blockchain ecosystem, they remain closed to the outside. The closed aspect of the blockchain infrastructure is by design, but is often unknown or not completely grasped by most adopters/users of these blockchains and their tokens, and how it can be limiting in the quest to scale up in real wold applications.

For a quick recap, smart contracts are rules written as computer code within a blockchain protocol, and execute a predetermined set of actions upon completion of a set of conditions. Smart contracts are designed to receive an input, execute a logic, and then update/record on the blockchain in an immutable way. Smart contracts are executed without the need of a third party, and can be designed to carry out a multitude of functions involving contractual transactions. Blockchains and smart contracts built on them are made super secure through cryptography, making them closed systems, with the inability to communicate with the world outside and relay or receive external data (off-chain data). This is therefore a limiting factor to the number of potential real world applications. To expand on the statements above, I will use a real world example. Consider a House buying/selling transaction between person A and B. Let’s say Person A can use a cryptocurrency token to pay person B per the terms set in a smart contract X. Once all preset…