Professor Trelawney from Harry Potter, The Three Fates from Hercules, Your Friend Who Swears They Predicted the Ending of an M. Night Shyamalan Film from the beginning of the film - All three of these are examples of “oracles”. Typically, when we think of “oracles”, we think of a person or persons dressed in shawls staring into a crystal ball and speaking as if possessed by a grave prophecy. Why then, on a blog of one of the foremost real estate solutions, are we discussing oracles? Well believe it or not, we at mogul are the blockchain oracle for real estate. In blockchain, an oracle does not mean someone who predicts the future, rather, an oracle represents the connection between on-chain smart contracts and off-chain events.
While simple in nature, the oracle problem presents a problem that prohibits real world applications of blockchain. The immutable ledger technology (blockchain) presents a wide variety of use cases that would solve inefficiencies in a number of markets. However, in order to apply blockchain to these markets, we need some decentralized, reliable source of data feeding into the smart contract.
One prime example of an oracle problem and solution in action is crop insurance. For those of you not familiar with the workings of a farm: farmers, like homeowners, take out insurance policies to protect any economic losses that may arise from weather damaging their crops (source of income). Farmers pay insurance companies premiums, and when certain weather conditions (like freezing temperatures and frost) damage the crops, the farmers receive payouts from the insurance companies for losses incurred. Using smart contracts, you could write code that collects the premiums from the farmers, and upon a weather event, such as freezing temperatures, the smart contract could make payouts to the farmers. As we had mentioned earlier, blockchain operates outside of other computer networks, so in order to trigger payouts from the smart contracts to the farmers, we need to feed weather data into the smart contract. One quick solution could be to write code connecting weather.com to the smart contract, and every time 32 degrees fahrenheit (0 degrees celsius) is breached, the code calls the smart contract, triggering the payout to the farmer. Simple enough, eh? Except, one data source does not provide the reliable, decentralized data we need to ensure accuracy. Therefore, to implement a truly decentralized oracle solution to the crop insurance problem, we would need to connect multiple weather services to the smart contract. The multiple data points could be collected in real time, and through an agreed upon benchmark (median, average, etc.), we could make sure the data is reliable. The solution to the oracle problem is reliable data fed into the smart contract.
Given the brick-and-mortar nature of real estate, the oracle problem presents itself in countless use cases. In our previous blog, we explain why blockchain and real estate are a match made in heaven. From the technical perspective, real estate and blockchain need a way to communicate in order to reach the true potential of their relationship. We need an oracle that aggregates data from every avenue of real estate and feeds the data into smart contracts to execute. The oracle will automate data collection, so that every transaction that occurs in real estate will register on the blockchain “automagically”. In connecting the data feed with the smart contracts, we can finally realize the full potential of blockchain in real estate.
At mogul, we strive to bring blockchain to real estate in its full form through our blockchain oracle solution for real estate. Our platform has begun the process of onboarding properties on-chain, and in doing so, the initial phase of the realization of blockchain’s application in real estate begins. Through our countless years and billions of dollars transacted in real estate, we understand the most glaring pain points that blockchain can mitigate. While we apply blockchain to the real estate market, we understand the new technology can be daunting to those without technical backgrounds. With our audience in mind, we ensure that even though you are receiving the benefits of blockchain, it will feel completely intuitive, and no experience with blockchain will be necessary. Over time, we will integrate additional products, and we will continue to educate along with their release. In our mind, the biggest barrier-to-enter real estate or blockchain is knowledge, so while we do offer phenomenal products, we hope to provide easily digestible information through our blogs to educate and empower. If you want to learn more about a subject or have an idea for a blog post, reach out to us at support@mogul.club.