Leading weather service AccuWeather is now an oracle.
That doesn’t mean it gets its predictions from ancient Greek hermits. Instead, it will supply cryptographically verified information that blockchain platforms and projects can use to set off smart contracts that do anything from paying off crop insurance to setting off storm warnings.
Instead, it means that AccuWeather has set up a node on the Chainlink blockchain, the leading source of oracle information. This allows it to provide weather information that is cryptographically signed when uploaded to the blockchain, so anyone who needs weather information for a smart contract can verify its provenance — the data came from AccuWeather, and cannot be forged or falsified.
“The ability to connect our premium weather data to blockchain networks is critical to supporting the many new smart contracts being built on-chain for the weather industry,” AccuWeather said in a news release on Tuesday (Dec. 14). “Smart contract developers need high-quality weather data from sources like AccuWeather to ensure outcomes are representative of true weather conditions.”
In this case, AccuWeather data could be used by parametric crop insurance companies, which offer payouts when specific conditions are met — such as paying an orange farmer when there is a crop freeze that will damage or kill his fruit, rather than waiting to assess actual damages after the fruit is harvested.
It could also be used by commodities investors hedging against a drought, or cause a trucking company’s systems to automatically send out instructions routing drivers around a rainstorm.
An AccuWeather oracle could even save lives, setting off local sirens and issuing text messages for a tornado early warning system instead of waiting for a human to receive the news and set off the warnings manually.
Any Way the Wind Blows
Oracles like Chainlink are blockchain middleware, providing trusted information sources that are needed for smart contracts to work. Anyone creating a weather-based smart contract can subscribe to AccuWeather’s oracle feed for a fee.
Smart contracts are at the heart of all centralized and decentralized blockchain activities. They are “self-executing” contracts, which means that once agreed to, they will automatically take set actions when certain conditions are met, without any human intervention. This is particularly useful in decentralized finance, or DeFi, in which contracts must be able to act on-chain based on off-chain data.
The idea is to eliminate the middleman in financial and other transactions. And while an oracle platform like Chainlink is a middleman, it is one that does not require human intervention — it provides a trusted source of information that both parties in a smart contract can agree on ahead of time.
In many cases, this takes the form of making a payment using cryptocurrency funds locked into the contract when it was created. So, if Frank bets Jane $100 that the Yankees will lose a game to the Boston Red Sox, both of them lock $100 worth of ether into a smart contract. When the Yankees are victorious, the contract executes, transferring Jane’s ether to Frank’s wallet and returning his own crypto as well.
Like all blockchain transactions, this contract is immutable, which means that once it is agreed to, it cannot be canceled or changed. Still, in the above scenario, Jane has to take action to agree that the conditions — Boston losing — were met. But what if the contract could be made to execute automatically when an agreed-upon trusted information source — Major League Baseball or ESPN, for example — posts the final score?
That’s the key to smart contracts, and really any blockchain transaction: The parties do not have to trust each other, because the immutable blockchain makes it impossible for one party to cheat.
In the language of cryptography, this makes blockchain transactions “trustless,” because neither side has to trust the other. (It also makes clear that cryptographers should never be allowed to name anything the general public will use, but that’s beside the point.)