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IPFS News Link • Blockchain

Blockchain smart contracts are finally good for something in the real world

• Technology Review

You have probably heard that blockchain technology and "smart contracts" are going to revolutionize our lives.

But there's a problem: before smart contracts can do anything really useful, they need a reliable way to connect with events in the real world—and that has proved impossible so far. This is the so-called "oracle problem," a technological challenge that is still hampering any chance that blockchain will break out and become a part of our everyday lives.

Until now, perhaps. A startup called Chainlink is combining its software with a trusted hardware system called Town Crier, developed by a leading academic cryptocurrency research group. Together, they might be closer than ever to solving the problem.

Smart contracts are computer programs stored in a blockchain. They can be used to automate the unstoppable transfer of crypto-tokens between users, according to agreed-upon conditions. "Oracles" are real-time data feeds that deliver things like weather data, currency exchange rates, airline flight information, and sports statistics to smart contracts.

The idea is that by working together, the two systems can allow blockchain-based services to interact with real-world events with a greater degree of trust than is possible from today's oracle services. For example, if your flight is canceled but you bought flight insurance, a smart contract might instantaneously pay you after getting an update from a trusted source of flight times.