Use Cases for Blockchain Oracles

There are many use cases for off-chain data in smart contracts. Here, we give a brief overview of some oracle use cases:

• Data markets: A data market simply provides (sells) data. It doesn’t care what it is used for or who buys it. Data can be customer data, weather data, economic data, machine operating parameters, etc. An oracle that acts as a data market could help to increase the trustworthiness of the provided data by verifying it.
• Supply chain: Oracles could improve the data quality in a supply chain and thus help its breakthrough in mass-market adoption. Applications could be customs declarations, location services that automatically release the payment as soon as the shipment reaches its destination or proof of origin, transport insurances, or proof of the origin of raw materials and goods.
• Insurance: A reliable data source is crucial for insurances. If the data is reliable and unambiguous, a smart contract could calculate insurance premiums and release the amount insured automatically in the occurrence of a loss.
• Decentralized finance: Here, mostly buy and sell rates from other markets are necessary for the smart contract to make profound pricing decisions. But data is also crucial for the assessment of credit risks of a customer.
• Prediction markets: When resolving a prediction market, off-chain data about the outcome of the predicted event is necessary. Oracles can provide the event outcome.
• Decentralized Energy: With solar panels, biogas plants, wind power stations, and other modern decentralized electricity producers, new settlement schemes become vital. This gets even more important when we recognize that former consumers transform into so-called prosumers (producer + consumer). In times of much wind or shining sun, they feed electricity into the network and in case of doldrums or night, they consume electricity. If the settlement is done on a blockchain, the amount of consumed and produced electricity needs to be recorded and made available to the underlying smart contract. This is a use case for an oracle.
• Gaming: Buying virtual goods inside a game and trading it on a blockchain or using location data to unlock a new level independently from the game publishers requires a connection to off-chain events.
• Others: There are plenty more use-cases of oracles like car rental, housing, accommodation booking, etc.