Explanation about Oracles and Flux’s unique features

In general terms

Flux Protocol is an open data infrastructure for creating unlimited, scalable markets without third-party intermediaries. Created by and for the community, every aspect of the protocol is open, allowing the community to design and develop customized solutions to work across an infinite range of verticals, from synthetic assets and derivatives to insurance and predictive markets.

About Flux Protocol

The decentralized Flux Protocol blockchain oracle is a necessary future mechanism for the crypto, facilitating communication between smart contracts and the outside world. It is needed for the massive use of blockchain in real-world industries, such as logistics, insurance, office administration, and others.

Idea

Without Flux Protocol, smart contracts would have to rely only on data already in their networks, which would severely limit their capabilities. So the widespread use of oracles brings us closer to a future in which blockchain can play a more important role in everyday life. But along the way, Flux Protocol developers have a host of issues to address to improve their security and efficiency.

Blockchains cannot collect data from and share information with the external environment themselves. For example, a smart cryptocurrency exchange does not know how much a coin is worth in the market right now or at what price it should be exchanged. It’s a lot like a computer that’s not connected to the Internet.

What Flux Protocol offers?

Flux Protocol oracles are services that connect blockchains with the outside world: decentralized applications, other blockchains, trading platforms, cloud providers, IoT devices, payment, and corporate systems.

So if a smart contract needs to know how much a token is worth or what the price of a barrel of oil is, it is the oracle that gives it that data.

Flux blockchain oracles verify the terms of smart contracts and also give them the information they need to execute them. They are not part of the blockchain and therefore do not compromise its security — the network is still decentralized, but it has external data. Connection to external resources is through APIs.

Flux is more than just an Oracles aggregator

It is important to understand that Flux Protocol oracles are not a source of information, but only a provider of it.

☑️Firstly

Oracles collect external data and process (verify) it. This data can be any condition of a smart contract: the value of a coin, the execution of a payment, or the current state of a blockchain network. At this stage, the oracle’s task is to correctly select the information and make sure that it is correct. For example, to select the actual rate of a cryptocurrency among dozens of quotes on different trading floors.

☑️Secondly

Another important function of oracles is to transmit data in the right format so that different systems (blockchains, decentralized applications, trading platforms, IoT devices, and so on) can communicate with each other. A blockchain network cannot simply communicate with any other system because they often use different programming languages and have different system requirements. But thanks to oracles, different blockchains can be interoperable.

How will the Flux protocol deal with these threats and why does it represent a new level of security and understanding among all oracles?

The Flux protocol is a decentralized oracle, which means that it uses information from many sources, not just one when choosing a result for a particular event.

☑️In addition

The Flux protocol is an Oracle Aggregator, which means that the Flux protocol also processes the huge data streams of many other oracles, comparing them and selecting the final correct outcome of an event, which almost eliminates the possibility of hacking by manipulating data for attackers. Simply put, if you need to defraud the Flux oracle protocol aggregator, you would have to cyberattack all sources of received information simultaneously, and that is simply not possible because there would be many such sources.

What’s the Bottom line?

The Flux protocol has the latest and strongest dispute resolution mechanism built-in, meaning that if your data source gives out false information, you will pay for it. This has been the case with other oracles before, but it is the Flux protocol that has combined all known mechanisms for a more secure system.