2.4.0. Fourth Component – Protocols
For the data on the DApp to communicate effectively with the smart contract data on the blockchain, there must be a common language between the DApp and the smart contracts. The Oracle will be the conduit that conveys this common language between the DApp and the smart contracts.
Such a language system is called a Protocol.
Remember the example of Aaron as the oracle that connected the Jews and God. How did Aaron connect his people to God? It was by performing those instructions ordained by God. For instance, when the Jews broke God’s laws, Aaron would perform the sin oblation and intercede on behalf of the people to God for forgiveness.
In other words, Aaron spoke the language that satisfied divine clemency on behalf of the people. Thus, Aaron, as the oracle, was the conduit by which an atonement language flowed from the people to God and also by which God’s language of forgiveness flowed back to the people.
In the same manner, a crypto oracle allows a Protocol, a language system, to flow between a DApp and smart contracts, and vice versa. Thus, the Protocol allows the DApp to share, modify, and utilise data with the smart contracts of the blockchain.
To help further understanding, consider the example of Charis’ business. She has been able to build a DApp for her lending services. Her DApp has then been connected to a blockchain by an oracle. However, for the data she has stored in her DApp to communicate with the smart contracts on the blockchain, there must be a common language the two must speak. That language that will allow her DApp to communicate with the smart contracts on the blockchain is the Protocol.
Therefore, when a customer submits her request to lend money through Charis’ decentralized system, the request passes from Charis’ DApp through the Oracle to the blockchain. Then the Protocol will interpret the request to the smart contracts on the blockchain.
If the request meets the requirement for lending, the deal will be sealed and the customer will receive the loan.
It sounds complicated. But not at all. With only a few clicks on the computer or some few taps on your smartphone, and within minutes, your loan is approved by Charis’ decentralized system. No long documentation and no bank official that will ask you too many questions to ascertain your credit score.
That is the new world we are in, powered by blockchain technology!