What is an Intelligent Oracle?

Let’s start with the basics: Imagine you’re using a smart contract on the blockchain, kind of like a vending machine. It can execute transactions automatically, but there’s a catch: It doesn’t know anything about the real world! If you wanted it to do something like check the weather or sports scores, it’s totally lost. That’s where Oracles come in.

What Is an Oracle?

An Oracle is like a helpful guide that connects smart contracts to the real world. Think of it as an assistant that can go fetch real-world information and feed it to the smart contract. Traditional oracles can gather specific types of data, like stock prices or weather reports, but they’re pretty limited. They only work with certain types of information that have been pre-set. For example, they can tell you the price of Bitcoin or the weather in New York, but that’s about it.

Enter Intelligent Oracles: The Next Level

Now, imagine an Intelligent Oracle, like a super-upgraded version of the basic Oracle. Instead of only grabbing specific bits of data, it can search the entire Internet for any data. Kind of like having your own personal AI assistant!

For example, an Intelligent Oracle based on GenLayer could:

• Check the weather anywhere in the world: Say a hurricane is hitting a coastal city; the oracle could fetch that information and trigger a condition payout automatically.
• Monitor news for updates: Imagine a smart contract that tracks news about crypto exchanges. If the oracle detects that a major exchange is under attack, it could trigger an emergency shutdown of withdrawal transactions.
• Create perpetual contracts on anything: From real estate to collectible items, using real-time data from the web. This means you could trade and settle perpetuals not just on cryptocurrencies but also on assets like property values or rare collectibles.
• Check election results: Need to settle a bet on who won the election? The Intelligent Oracle can check top news websites and bring back the final results to settle a prediction market.
• Automate financial products: Smart contracts that adapt investment strategies according to the latest market trends, making sure your portfolio stays up-to-date without you lifting a finger.

How Does an Intelligent Oracle Work?

It’s all about connecting blockchain with the internet. GenLayer’s validators (the machines that check and approve transactions) use AI to search the web for information. These validators are connected to a large language model (LLM), which is like the brain behind the oracle. Similar to how ChatGPT can search the internet for you, GenLayer’s Intelligent Oracle can read websites, gather data, and make decisions based on what it finds — only that it is way more reliable and safe than ChatGPT alone. 

Once the oracle has fetched the data, it passes it to the smart contract, which then uses that information to execute the condition. For example, if the oracle figures that it’s raining in New York, a smart contract could pay out a rain-related insurance policy.

Why Are Intelligent Oracles a Big Deal?

Intelligent Oracles make smart contracts intelligent! Instead of relying on a small set of pre-programmed data, they can pull real-time information from anywhere on the internet, allowing for more complex and dynamic applications. This opens up new possibilities for creating automated, data-driven solutions that adapt to the world around them in real time.

The Future of Intelligent Oracles

As AI continues to improve, Intelligent Oracles will get even more intelligent. They’ll be able to handle more complex tasks, like analyzing thousands of documents simultaneously or working with not just text, but images, videos, and even audio. This means that blockchains will become more connected to the real world than ever before, making them more useful for all sorts of real-world applications.

In short, Intelligent Oracles take the idea of a basic oracle and make it supercharged, allowing smart contracts to interact with the entire internet, making them truly intelligent and capable of handling real-world events.

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