How does external data enter the smart contract?
If a bitasset is essentially going to be pegged to a fiat currency,
stock, commodity, or anything else, then the blockchain needs to be told
about that real world data. The most obvious solution here is to have a
trusted entity publish the data into the blockchain. There are actually
already a few different companies, such as Reality Keys, who plan to specialize in publishing real world data for smart contract resolution. The solution of choice for bitcoin core developer Gavin Andresen is to use a pool of data publishers to avoid risks associated with centralization in one oracle. There are also more decentralized solutions, such as Truthcoin, that aim to source real world data from a much larger number of properly incentivized actors in a low-trust prediction market.
The author: Kyle Torpey
#Bitcoin Writer at @InsideBitcoins - Featured on @VICE’s @motherboard, @businessinsider, @LetsTalkBitcoin, and @RT_com’s @KeiserReport