Abstract
Scarce and niche in the literature just a few years ago, the blockchain topic is now the main subject in conference papers and books. However, the hype generated by the technology and its potential implications for real-world applications is flawed by many misconceptions about how it works and how it is implemented, creating faulty thinking or overly optimistic expectations. Too often, characteristics such as immutability, transparency, and censorship resistance, which mainly belong to the bitcoin blockchain, are sought in regular blockchains, whose potential is barely comparable. Furthermore, critical aspects such as oracles and their role in smart contracts receive few literature contributions, leaving results and theoretical implications highly questionable. This literature review of the latest papers in the field aims to give clarity to the blockchain oracle problem by discussing its effects in some of the most promising real-world applications. The analysis supports the view that the more trusted a system is, the less the oracle problem impacts.
Highlights
Scarce and niche in the literature just a few years ago, the blockchain topic is the main subject in conference papers and books
All real-world blockchain applications are affected by the oracle problem, it is unusual to read about how a business can overcome the oracle problem or how this issue can be overcome in the literature [22,23]
A recent systematic literature review on the subject showed that from a sample of 142 journal papers discussing blockchain real-world applications, only 15% considered the role of oracles, and less than 10% underlined the limitations of the oracle problem [23]
Summary
Scarce and niche in the literature just a few years ago, the blockchain topic is the main subject in conference papers and books. The hype generated by the technology and its potential implications for real-world applications is flawed by many misconceptions about how it works and how it is implemented, creating faulty thinking or overly optimistic expectations. Too often, characteristics such as immutability, transparency, and censorship resistance, which mainly belong to the bitcoin blockchain, are sought in regular blockchains, whose potential is barely comparable. Oracles are centralized and trusted third parties that constitute the interface between blockchains and the real world [19].
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