The Solution: A Decentralized Oracle Network

Source: https://witnet.io/about

The Witnet protocol aims to create an overlay network that connects smart contracts to any online data source, in a trustless, decentralized manner. These sources include, but are not limited to:

• Sport results

• Stock prices

• Weather forecast information

and other blockchains.

The protocol achieves this by way of a distributed network of peer-nodes (colloquially referred to as witnesses) who earn WIT tokens as a reward for retrieving and securely delivering web information to smart contracts. This is a Decentralized Oracle Network (DON).

More precisely, we outline a Decentralized Oracle Network as a computer network made up of nodes (computers running a specific software), which communicate and operate as peers in compliance with an agreed protocol:

• to acquire knowledge of information that is external to the network,

• to verify and agree on the veracity of the acquired information,

• and to supply the verified information to other applications or networks that may require it.

In other words, the Witnet Protocol is Decentralized Oracle Network, a peer-to-peer (P2P) network capable of processing Retrieve-Attest-Deliver requests.

You can find a deeper explanation of the DON in this post.

The bottom line is that a considerable number of randomly selected, anonymous peers retrieving information from one or more sources can converge into a single truth about the data they retrieved if a majority of them are incentivized to report the retrieved data honestly and they apply a common consensus algorithm that resolves inconsistencies.

This Decentralized Oracle Network (DON) maintains and distributes a blockchain data structure, which serves as a common ledger for the operation of the protocol. Witnesses are also in charge of validating transactions in the network and bundling them into blocks that get appended to the blockchain periodically.

The protocol has been conceived to ensure utmost decentralization and fairness, so each witness' weight in the network is not aligned to their computing power. Instead, the probability for every witness to be assigned tasks or mine new blocks is directly proportional to their reputation as an honest and reliable node operator.

Witnet aims to deliver verifiable, accurate data queries in a totally decentralized, trustless manner. To achieve this, numerous randomly selected, anonymous peers retrieve information from one or more sources and converge that information into a single truth. A common consensus algorithm is then applied to resolve inconsistencies.

Data retrieved, attested and delivered using the Witnet protocol is reliable without centralized verification because it comes from anonymous, randomly selected, non-coordinated nodes who are incentivized to remain honest and to compete for rewards.

In addition, integrity of this data is guaranteed by a consensus algorithm that detects fraudsters, who are punished.

The progressive reputation protocol plays a central role in ensuring every participant is both active and honest, by creating short, middle and long term incentives for them to abide by the protocol, and not to tamper with the data they broker.