Oracles: the gold of the web 3

Many of the big tech companies on the NASDAQ suffered an irreversible purge and bloodbath in the year 2000, the well-known dotcom bubble. Little or nothing seems to have been learned from those events, at least that is what society and the manipulated media show me, when they make the same reference and use the same topics to talk about cryptocurrencies. It is good to remember and highlight everything that went wrong in order not to repeat it and to learn from it, but at the same time it is also necessary to focus on all those companies that emerged and managed to find their niche on the internet. The best example was clearly #Amazon, and I say this because of the excellent comparison I find between #bitcoin and Amazon in terms of annihilating and catastrophic narratives predicting the end of bitcoin, largely motivated by their lack of understanding. I remember press headlines and opinions from experts in financial columns, where they branded the idea that Jeff Bezos (CEO of Amazon) had as meaningless nonsense, since it occurred in a new business paradigm, where his role was that of a simple intermediary, which could not generate value for society and, therefore, develop a profitable and sustainable business model over time.

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I don’t even want to think about all those people who in 2001 did not buy Amazon shares. Influenced by these expert opinions, simply dinosaurs incapable of evolving and not being honest enough to raise their hands to say that they do not understand something, even if it is worth studying it for the possible potential it may have.

Anyway, I think I’ve just given you a déjà vu about bitcoin and cryptocurrencies in general, haven’t I? Well, the value of things follows the paradigm shifts that occur over time and not the other way around, don’t be fooled!

One of the biggest trends in the world today is data. Unfortunately not for all, but for sure opportunity for some. There is a lack of management and use of that data, but that is not the worst thing, the worst thing is that it is only monetized from one side, the short term, and it is not monetized from the other side, more long term, but where the business really is: the validity of that data to be exploited in Smart Contracts.

I ask you to extract the juice from this article. Forget about the market, the bearish trend that we have been experiencing for more than 1 year, and of course not to value anything by the quoted prices of its assets. Do this and you will see how nourishing you find each line you read, and not because they are of great quality, but because you have just isolated yourself from the noise and focused on the information. Then you will be left with the part that interests you the most or that you have understood the best, in order to form your own judgment. We are at a perfect moment in history to believe and follow a clear winning trend, while many write and warn about something they don’t quite understand, and that is the key.

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There is no doubt that in this emerging market there are projects that are positioning themselves as leaders, and others that will fail because they are a cheap Chinese copy, or a replica that, although cheaper to the human eye, is more expensive in the pocket due to the risks involved.

In these moments of pain, the leading projects are very compressed springs, waiting to be released to take a great leap that will take them to new bullish scenarios never known before, fruit of the excellent fuel they have in their tanks to be used in this launch, accumulation, necessity and utility.

Decentralized oracles are undoubtedly a very strategic and high-growth sector, driven by several factors, but largely by web 3 (the tokenization of the tangible) and decentralized finance (the democratization of access to money). All this, added to the misuse that is given to the data and the little part of the business that is exploited, make up a perfect price/value cocktail, since decentralized oracles will allow us to use or share data when necessary, or for the common good, while at the same time allowing us to retain ownership of them. I do not believe that we are witnessing, in the last year, a clear acceleration in the emergence of key trends (artificial intelligence, biology, computation, etc.) without anything behind it to drive it.

Another key factor, which points at their potential, is that oracles are not only limited to the world of cryptocurrencies, but also serve a whole universe of information (trillions of dollars move every year in this sector), providing veracity and service to the digital plane of the world we are heading towards, which is now beginning to appreciate and understand sectors as traditional, same as the financial sector.

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Therefore, it seems that 2023 is coming loaded with tokenized assets in the form of bonds, equities or real estate, among others. Even more reason for needing a robust system of neutral data, showing only true prices in real time. In short, the outside world is coming, and it’s a big one, bringing with it billions of dollars, but it also brings complexity and disorder. Therefore, a central point of immutable and transparent sanity is needed to make that incursion in the best possible way, without collateral damage. But let’s not just focus on the financial sector, let’s go a mile further and think about car manufacturers and especially autonomous cars and the thousands of data per second they will handle. Artificial intelligence with hundreds of thousands of autonomous robots all over the world along the same lines as cars and their data, sustainability and environment, decentralized social networks, insurers, etc. 

In short, oracles are ready to manage and secure trillions of dollars of data, regardless of what happens in the crypto market. This protection function is vital to generate the necessary trust in their service, therefore, providing economic protection against malicious data providers through mechanisms such as a well aligned and incentivised staking, is something relevant to understand in order to determine the prosperous future of the oracle industry, because if there is no high economic cost when carrying out an attack, it will not be able to generate a deterrent effect to the attacker, and this will be the end of that oracle.

In short (and to finish this article), we are facing a very powerful sector, aligned with the digital future of society and civilisation in general, in the financial, industrial, logistical, health and all those areas we can imagine. As you can see, determining the value of oracles is easy, and therefore extrapolating it to the price of the token that each project represents is also easy in the long term, as its value increases with the adoption and correct use of staking, making the network more secure and reducing the supply in circulation.

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Reflection: Years ago someone much wiser than me explained to me in a tremendously simple way the potential of oracles, in just 5 minutes I understood it, and therefore I did not hesitate to put my money in. Imagine that we are 2 years after the IPO of #Facebook#Google or Amazon, but we do not understand their potential or their business model well enough to buy their shares, but we are not blind, we realize where the world is going and we certainly understand that they can be tools of massive use with a great appreciation. For that reason, and because we know the data sector better, we decided to invest in its engine, in its soul, in what gives it meaning and reason to exist, which is data storage (you will agree that a smart investment at that time was to invest in servers). 

Well, I saw the same thing with oracles and smart contracts: not investing in Ethereum in its initial stages was not a mistake, as I understood that the business will be in the management and correct use of the data that is transported from the outside to the inside of the blockchain in these smart contracts. 

In short, I believe that investing in oracles may even become a better option in the future than investing in smart contracts, because smart contracts, as I have highlighted throughout the article, do not depend only on the crypto sector.

Now it is up to you to research which projects represent the oracle sector and find your unicorn 😉