Enterprises Need Third Parties for Oracles to Work

Enterprises Need Third Parties for Oracles to Work

(Tobias Cornille/Unsplash)

Paul Brody is a Principal and Global Blockchain Leader at EY. 

Oracles, an often overlooked feature of blockchain technology, are having a moment. In ancient times, oracles were people or gods who provided wisdom or knowledge. In blockchains, they are mechanisms for providing sources of truth that did not originate within the system itself.  

For much of the blockchain era, especially in the era of cryptocurrencies, oracles have not had a significant role to play. Whether or or most ICO tokens, everything you need to know about the token, such as ownership and embedded logic, exists on the chain. No external wisdom is needed.  

Now, as blockchains find new uses, this long-neglected functionality is suddenly the hottest ticket out there. In the future, they are going to have an important role in enterprise blockchain usage, enabling business and financial operations in both the “real world” (e.g. off-chain) as well on the blockchain. From financial services to product purchase agreements, at least some information from exchange rates to interest rates to proof of shipment delivery is needed from outside the blockchain. And because deals on the blockchain will depend on this information, it’s absolutely critical it is trustworthy.

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