Oracles: A key component of blockchain sports betting
To begin simply, oracles allow blockchains to access data located off-chain. In the case of sports betting, this would be critical data such as line changes and event results. Also the range and amount of data generated during sporting events is rapidly growing so next-gen oracles will certainly be expected to keep up. Players and equipment will increasingly have smart devices embedded and vast amounts of resources are going into various ways to harness all of the data from these.
Aside from any extra future demands, oracles might seem fairly straightforward and simple at first glance. But the nature of blockchain and decentralization in general comes with some specific demands and a vast array of potential issues. Data must be both as accurate and timely as possible, while being done in such a way that resists manipulation while still remaining sufficiently decentralized. Each of these demands can work against each other and tradeoffs must often be made, so it is quite a difficult balancing act to say the least.
To further complicate things, a recent report from Messari details the main types of attacks that oracles can face. The first is one inherent to blockchains themselves – a 51% attack, which is when an attacker gains control of a majority of oracles and out-votes the honest data in favor of their own.
Next is a mirroring attack, which can occur when too many oracles are sharing data or data sources. False data can then be spread across enough oracles to confirm it as true. The third is data manipulation, which is somewhat related to the mirroring attack. This one occurs earlier in the process though, at the data sources themselves. It could either come from a trusted source that has been compromised or from an outright malicious source.
Lastly there is the liveliness issue, which is a major reason why pushing data in a timely manner is so important. Updates that arrive too late can result in a whole host of potential problems, depending on how the network operates. For sports betting in particular it can be as minor as a short delay in bet resolution, or as severe as line changes being delayed and causing major losses to the network.
Oracles is one area where it is absolutely crucial to have deep expertise with betting markets in addition to the requisite knowledge of crypto. They are a necessary component in the core function of blockchain betting and have been one of the largest stumbling blocks for so many projects trying to create blockchain betting solutions. For a team with a unique blend of betting and crypto knowledge however, there are some amazing possibilities for the future and it certainly will be interesting to see what they create.