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Binance Oracle: An innovation connecting smart contracts and real-world data

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At the end of October, Binance, the top cryptocurrency exchange, announced the launch of Binance Oracle – a data feed network that makes it possible for smart contracts to connect with real-world data. This innovation is designed to enable current DApps and partners on the BNB Chain that are part of the Web3 ecosystem to access advanced computations and data sources. According to Binance, more than ten BNB Chain projects have already joined the Binance Oracle network, and this data service will support other blockchains as well soon. This brand-new data service is a valuable addition to the BNB Chain ecosystem, a substantial Web3 contributor, and another innovation likely to change the crypto space dramatically. 

Binance has always put its efforts into developing new features, and there’s only one purpose behind it: to enhance users’ experience as much as possible. It’s already a trusted crypto exchange that offers endless opportunities to users. On the exchange platform, there’s live data on the Ethereum price, as well as that of other cryptocurrencies. Moreover, you can use Binance Pay to grow your business or simply hold your crypto funds and enjoy a seamless trading experience.  

Understanding blockchain oracles

Oracles can be viewed as blockchain middleware because they unite two realms. Through that connection, smart contracts can perform transactions relying on information outside the blockchain, like temperatures and interest rates, knowing that the information hasn’t been altered. Oracles are not a real-world information source in nature; they collect the data from actual databases, communicating it efficiently to the blockchain. There’s a mutual relationship between blockchains and oracles, as oracles also receive on-chain information they later deliver to external apps like banking-related ones. This offers possible new uses for companies, like supply-chain tracking. Think of blockchains like a PC that’s not connected to the Internet. It’s impossible for this device to access real-world data; it is limited only to the files on the local hard drives.

A blockchain works similarly, as it can access only those transactions recorded on the ledger, reducing the number of applications you can use without real-world data. Oracles change that by providing an Internet connection and allowing blockchains to access external data for smart contracts. But as efficient as they are in solving this issue for blockchains, oracles pose a problem regarding centralization. Because of their decentralized features, blockchains can protect against unique points of failure. For instance, suppose a cybercriminal obtains your private crypto keys. In that case, they will access only someone’s funds.

On the other hand, if a bad actor accesses a centralized crypto exchange, multiple accounts will be compromised at once through a data breach. In other words, a decentralized system requires numerous individual hacks, but a data breach affects millions of people in a centralized one. Fortunately, decentralized oracles bring a solution to this vulnerability by utilizing distributed data sources. Decentralized exchanges enable individuals to change assets with one another through an open ledger that no one takes ownership of.

Web3 and what Binance Oracle means for it

Web 1.0. Web 2.0. And now Web 3. This is how the Internet evolved. The Web3 puzzle encompasses AI, encryption and privacy – three crucial pieces shaping this new version of the Internet. The main focus of Web3 is decentralization, which is the goal of allowing everyone to take ownership of online communities, ensuring transparency in data sharing. Rather than storing data on Google, it will be possible to share and store it in different locations. DAOs, or Decentralized Autonomous Organizations, will be the ones to share all the information – these are groups built to work towards a common goal. How will Web3 affect your life? The most important advantage is that you’ll own the data, and you’ll be able to use it to build a better life. AI could become your personal butler, creating customized experiences through the data you control. This could go as far as creating personalized environments through AI.  

According to Gwendolyn Regina, the BNB Chain Investment Director, the new version of the Internet implies well-connected smart contracts. Therefore, using oracles is necessary to enhance smart contracts’ knowledge about the events outside of the blockchain that will later be followed by specified actions as a response to those events. Binance Oracle is a valuable contributor to Web3, as it provides a reliable and stable Oracle network with accessibility characteristics and detailed accuracy. Through smart algorithms, the index prices on Binance Oracle are verified for consistency and veracity. There’s a unique infrastructure for each regional domain, which ensures regional calamities can’t affect the overall system. Detailed data monitoring architecture makes real-time responses and alerts possible. Binance Oracle is highly reliable, combining five resilient elements: sourcing price data from several centralized exchanges and aggregate prices by utilizing a smart algorithm and internal Threshold Signature Scheme. This signature mechanism ensures data security doesn’t allow any single point of failure, resulting in enhanced safety. Moreover, the data will be checked several times to ensure its authenticity by utilizing the Binance public key. This will guarantee that the data isn’t altered in any way. 

For Binance, innovation comes first

In the crypto universe, innovation is at the core. Without its revolutionary features and updates, the industry would have never seen such growth. Binance is a top cryptocurrency exchange for a reason, as it puts innovation first. Throughout time, the company has constantly proven its unwavering commitment to enabling users to access the much-desired financial freedom. Binance has focused on expanding its product line across the exchange and facilitating access to different financial tools and new job opportunities within the blockchain.

Moreover, the company has always committed to empowering others. To this end, it has prioritized education and deepened crypto adoption in Africa by teaching people how cryptocurrencies work and how to protect themselves from common scams. Binance educated more than 600 000 Africans about crypto, which is crucial in a post-pandemic world plagued by increasing inflation and economic decline. By doing this, the company ensures users can access essential resources to help them succeed even in uncertain conditions. But the company’s product offerings are just some of the things Binance has focused on. The company has also been vocal about why regulation is crucial in boosting mainstream adoption of cryptocurrencies. During the past year, Binance has engaged regulatory bodies worldwide at unparalleled levels. This is a significant step towards building certainty around regulation in the industry. Moreover, it also emphasizes that cryptocurrencies won’t go anywhere and that mainstream adoption can become a reality.

Disclaimer: This is a paid post and should not be treated as news/advice.  

With Masters in Mass communication and journalism, Anjali's interests lie in blockchain technology adoption across emerging economies.

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