philip lelyveld The world of entertainment technology

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

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.

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.

The core component is a program that runs inside an isolated piece of hardware called a secure enclave.

The enclave’s function is to protect the program from malicious attacks and keep the computation confidential.

Town Crier may be more trustworthy than other data feeds, but on its own it doesn’t offer the reliability that decentralized systems do. That’s where Chainlink comes in. Its software orchestrates decentralized networks of oracles to draw on multiple sources of data for smart-contract-based services so that they don’t have to rely on a single one.

Using cryptography, the Chainlink service provides proof on the blockchain that the data is in fact the information it committed to delivering. Customers can pay for different levels of decentralization, and the nodes can make money in return for submitting data. Nazarov says the combination of Chainlink’s software with the Town Crier hardware system is the first “provably secure, decentralized oracle network.”

See the full story here: https://www.technologyreview.com/s/612443/blockchain-smart-contracts-can-finally-have-a-real-world-impact/