IOTA Oracles

The Oracle Problem

Oracles provide blockchains with outside information, typically for use in smart contracts, or provide interoperability between different distributed ledgers.

While oracles are mostly meant to be a bridge between the external/offchain world and decentralized networks and services, they suffer from the age-old “Garbage in, garbage out” problem. If the data going into an oracle can be manipulated or censored, it is possible that “wrong” data would lead to “wrong” results. Some oracle solutions try to solve this by ensuring that oracles are using input from a sufficiently large number of independent sources. Other oracles on the market have proposed a set of standards to bring off-chain data on-chain, but even they suffer from inherent bottlenecks that can inhibit real-world adoption.

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What are IOTA Oracles?

IOTA Oracles bring off-chain data to decentralized applications and smart contracts on the IOTA network. The IOTA Tangle offers a few key advantages compared to a conventional blockchain oracle solution:

• IOTA transactions are feeless
• IOTA transactions can hold a fairly large amount of data
• IOTA’s network operates in near real-time
• Fetching data using an IOTA node is lightweight and efficient
• IOTA Oracles supports diverse security and data structuring capabilities

How do IOTA Oracles work?

From the IOTA viewpoint, optimally trusted data needs to come directly from the point where the data is generated, while being processed and secured in a decentralized manner. The potential of data manipulation is greatly reduced if the source (e.g. a sensor) submits data directly to a tamper-proof distributed ledger without going through several intermediaries.

Here we introduce the first, and most simple IOTA Oracle, the First Party Oracle. IOTA First Party Oracles do not use external data sources, nor data that was processed and made available on a DLT by a third party, but instead rely on data that has been submitted to the IOTA Tangle by the data issuer itself. In the context of IoT networks, “data issuers” would refer to the sensors themselves, without being manipulated or reformatted by anyone or anything.

Once IOTA Smart Contracts are live, First Party Oracles can be used to feed smart contracts with data directly, without having to worry about an intermediary to retrieve, process, host or maintain data. Unlike some other solutions on the market, the IOTA Foundation never interacts with data supplied by data providers.

You can watch a video of how it works by clicking on the link.

https://blog.iota.org/introducing-iota-oracles/