Polkastream Platform Oracle Use Case Research Study

Polkastream

Published in

Polkastream

14 min readJan 11, 2022

Summary of Key Discussion Points

Purpose of Blockchain Oracles

Blockchain oracles serve a specific purpose: to integrate third-party data into the blockchain. This is especially useful for triggering smart contracts that need external data. The oracle can deliver this information to the smart contract, automatically triggering the financial transaction. This removes the need for any middlemen or the risk of glitch occurrences.

Industry Implementation

Many industries have already started using blockchain oracles in their applications, however, the video and film industries remain largely untouched by this technological revolution. This paper will focus on what video streaming services and platforms are currently using to store their data, and how blockchain oracles can improve many of their services.

Advantages of Cloud Services

Cloud services allow the streaming platforms like Twitch or YouTube to work seamlessly, and with little lag. These cloud providers have the infrastructure to make the streaming platforms extremely scalable. All video streaming providers (even Netflix and Hulu) do not see the use cases for blockchain oracles, mainly because they want to remain in control. They can have more control through centralized servers and solutions. Plus, why change what is already working?

Benefits of Blockchain Oracle Use Cases for Video Streaming Platforms

Video streaming platforms can use blockchain oracles to improve their services in a myriad of ways. The biggest ways are for more interactive videos, as well as rewarding the most engaged users in a more streamlined and automatic manner.

Blockchain oracles can reward the most active content creators, as well as viewers. People who watch the ads can also get rewarded, creating more incentives to watch the ads. This can boost ad watch time, and therefore ad revenue.
Blockchain oracles can also make the videos more interactive, and even change completely if certain criteria are met. For example, the background of a streamer can change based on the time of day that a person is watching, or a video can change its ending depending on how a streamer answers a poll. This effectively bridges the gap between gaming/Metaverse and video streaming.
Finally, blockchain oracles can reward all users in a fair and decentralized manner. The oracle could reward the users based on the oracle data, without any intervention of a middleman. The only risk is if the third-party data is corrupt or inaccurate.

Executive Summary

Video streaming platforms do not use blockchain oracles for now. However, blockchain is the future and the video streaming platforms may be left behind if they do not adapt to change quickly enough. For now, they have a growing user base, but this may not last if other video streaming platforms take advantage of blockchain technologies to improve the user experience before them.

Full Overview

What is an Oracle?

According to Miriam Webster’s dictionary, an oracle is ‘someone (such as a priestess) through whom a God was believed to speak’. This actually delivers the idea of an oracle in tech quite well: the oracle delivers outside data to a program or blockchain. According to CoinDesk’s definition: ‘an oracle sends data from the outside world to a blockchain so specific data, like temperature, can execute the disbursement of money’. The other definitions of Oracle have to do with the company Oracle, which is the largest database provider in the world. Oracle does the same thing, providing data (as well as recently cloud services) to different businesses and corporations around the world, so that they can use this data in their own programs and software.

There are at least five different types of oracles that exist right now: software (or deterministic) oracles, hardware oracles, inbound oracles, outbound oracles, and consensus oracles. We will explore each type of oracle more in-depth below:

Software (or Deterministic) Oracles: They are a single-source feed of data. This single source of data will trigger actions to the smart contract (or application), based on predetermined rules that are coded into the oracle. This is great for use cases where the outside data can be trusted. The data comes from a single source, usually an API.
Hardware Oracles: These oracles gather data happening in real life. This data is gathered usually through RFID chips, which can then send data to the blockchain (or application). A simple use case for this is a motion sensor that tracks people entering a store. Once there are a certain number of people entering the store, the establishment automatically sends a donation.
Inbound Oracles: These oracles take external data to a smart contract (or application). One example here would be the GPS tracker on a person’s phone; Pokémon GO uses an inbound oracle for example to track how much a gamer has traveled, and reward the gamer accordingly.
Outbound Oracles: These oracles communicate smart contracts or (platform) data to the outside world. A great example here would be certain alarms or sirens that go off only when a certain wallet receives funds. With an inbound oracle, it is the opposite. It is receiving data instead of giving data from the blockchain (or application) to be used in real-world cases.
Consensus-Based Oracles: They do not use a single source of data, unlike software oracles. They need a group of oracles to agree on the data before sending it to the blockchain (or application). This is especially useful when providing price data to the blockchain so that the blockchain can know the exact price of a stablecoin, for example. Most Chainlink oracles are price feeds for this exact reason: they are consensus-based oracles and require multiple oracles in order to function correctly.

For this paper, we will mainly focus on the blockchain oracle definition, and explore how the current centralized streaming giants could benefit from integrating oracles into their platforms.

Use Case and Risk of a Blockchain Oracle

The classic use case of a blockchain oracle is to allow third-party data to be integrated into the blockchain. This can be incredibly useful for farmers who have drought insurance on their crops for example. If there are more than 15 days of rain in a year, then the farmer will likely yield a good crop and the smart contract is not triggered; nothing happens. However, if there are less than 15 days of rain in a year, then the farmer will likely not yield a good crop; the smart contract will automatically be triggered and pay him/her the insurance benefit. There would be no need to file a claim or have any third party involved for the farmer to claim his benefit. This can save a lot of time and money, since there are no middlemen involved for this transaction to happen. Everything happens automatically and autonomously thanks to the smart contract interacting with the oracle’s data.

Having the smart contract rely on third-party data is precisely its risk: the third-party data could be inaccurate or tampered with. In the farming case, it is possible that the oracle is receiving inaccurate data, where the third-party data source says that it rained more than it actually did. Therefore, the risk of an oracle is simply the reliance on where the oracle gets its data from. There are ways to mitigate this risk, by fetching the data from reliable sources, but no data source is always perfect and can be prone to bugs and glitches from time to time.

Now that we have explained a bit more in depth the use cases and risks of an oracle, let’s explore how oracles can be used in the streaming industry as a whole.

Oracle Use Cases for the Streaming Industry as a Whole

Oracles integrate third-party data for a blockchain or application. So, how can this be useful for the streaming industry as a whole? Mainly, it can allow more interactive videos.

Streaming platforms tend to not be interactive enough. The video is always the same, no matter what external events or influences happen. What would be incredibly interesting would be the background of a certain streamer changing color depending on the time of day for example, or a certain exclusive video portion that is only available during certain events, such as New Years, for example. Many video streaming platforms could benefit by making their videos more than just videos; they could be interactive videos that change based on outside data.

An oracle would also be an incredible tool for streaming platforms if they ever decide to reward their streamers or users with cryptocurrency. The oracle could track a user’s (streamer, viewer, or content creator) activity, and reward him/her accordingly through cryptocurrency. The oracle would provide important website metrics to the blockchain, so that the smart contract knows how to distribute the rewards easily and automatically.

Finally, streaming platforms can use oracles to provide solid data for analytics and their in-house algorithms. We know that TikTok is the raging success that it is today thanks to the incredibly addictive algorithm, which somehow knows exactly what kinds of videos that you want. The oracles can gather the necessary data needed to make the algorithms work in the background.

Oracle Use Cases for Each Streaming Platform Individually

So far, no centralized video streaming platform has used blockchain oracles for its services. However, some of them use the company Oracle for their cloud services, allowing their videos, user activity data, and other data to be stored conveniently all in one place.

We will explore each streaming platform’s current “oracle” solutions being used, and then how they could benefit from blockchain oracles to improve their services and user experience.

TikTok: TikTok has chosen to use Oracle as its cloud provider, mainly because Oracle bought out a large portion of TikTok in order for US citizens to continue to use the platform. This was during a time when Trump was President and wanted to ban TikTok in the US. TikTok uses Oracle’s cloud to store all of the information on the platform, from the account passwords to each person’s videos to user data. This makes Oracle’s cloud an important provider for TikTok to run smoothly and efficiently. However, TikTok has made no use of blockchain oracles, although it announced a partnership with Audius to manage its internal music library in summer 2021.

TikTok boasts over 1 billion users worldwide, meaning that roughly 20% of everyone using the Internet is on TikTok. 90% of TikTok users access it on a daily basis, making it an incredibly strong and addicting platform. It features small clips and has an impressive algorithm which tailors content to the viewer perfectly.
TikTok’s specialty is short clips. Blockchain oracles would allow users to not need to rely on TikTok’s internal database in order to receive information, allowing a more stable and reliable feed of both internal and external data to the platform. TikTok could also use blockchain oracles to make its platform more interactive: just like Instagram stories, TikTok could use data supplied by the oracle to change how the video looks and performs. It could also change the suggested videos this way, as well as the suggested ads.
Finally, TikTok could use blockchain oracles to dramatically cut accounting costs. The data can be used to distribute the proper amount of rewards to the TikTok content creators in a simple and streamlined manner; no need for an accounting team!

Snapchat: Snapchat also chose to use Oracle as its cloud provider. This allows Snapchat to keep all of the video data, user account passwords, and more in a centralized place. Just like with TikTok, the risk is if Oracle’s internal servers go down at any point, the platform stops working. The upside is that Oracle’s specialty is database, and probably has a much better infrastructure compared to Snapchat’s internal database.

Snapchat has 280 million daily active users, with 5 billion+ snaps made every day and a total of 18 billion Snapchat daily video views. Overall, people use Snapchat for their close friends, as it is a bit less public than TikTok. It is a great way to share quick stories that can be watched on the go. Its biggest feature is its Augmented Reality (AR), which can morph someone’s face into an animal face, for example. 200 million+ Snapchat users regularly use the AR feature that is in the app.
Snapchat could use blockchain oracles for many useful features. The largest one is definitely for customizing some of the AR features based on external data. For example, a person living in a certain zone could gain access to unique Snapchat tags. This already exists but in a more centralized manner. The blockchain oracle could allow a more reliable stream of data, if the oracle being used is a consensus oracle.
Snapchat could also use blockchain oracles in order to reward users for watching ads. So far, there is no reward for Snapchat users to watch ads on the platform. Giving Snapchat users incentive to use the platform by rewarding them when they watch ads is another way in which Snapchat could make good use of blockchain oracles.

Twitch: Twitch uses Amazon Web Services (AWS) as its cloud provider. This comes as no surprise, since Twitch is owned by Amazon.

Twitch is the world’s leading game streaming service. Many gamers from around the world stream on Twitch. On average, there are 2 million+ viewers a day and 100k+ streamers. Twitch streamers can propose a subscription model, where engaged viewers can pay for exclusive content.
Twitch can use blockchain oracles in many ways as well. Twitch already uses polls to help streamers understand what their audience wants to see them stream. This adds a level of interactivity to the audience, making them feel engaged throughout the experience. This experience could be enhanced by rewarding the poll responders. This would be possible through a blockchain oracle, which would execute a smart contract once the user has responded to the pool. The user could be rewarded with voting tokens, helping the audience truly decide what the streamer should produce next. This would give the most active viewers a larger voting weight to the channel compared to the less active viewers. This would allow a more fair voting experience, where the more active audience has more of a say.

YouTube: YouTube’s data is stored on its internal servers, mainly because Google is a huge company which has that capability. According to this website, YouTube’s data is stored across 5 or 6 data centers. These data centers store everything, from account passwords to the videos themselves.

YouTube is the world’s most used video application, with over 2 billion monthly users. It is available in over 90 countries, and 576,000 hours worth of video content are published on YouTube each and every day. YouTube generates over $15 billion from ads every year, and continues to grow its users every day. YouTube currently has an incredibly active user base, even trying to capture the TikTok audience thanks to its new product, YouTube Shorts. It boasts an impressive recommendation algorithm, very similar to TikTok. Advertising providers can use the data provided by AdSense in order to target the perfect audience for their product. YouTube is loved by both advertisers and content creators for this reason: it is the platform with the most users, and advertisers can target their ads perfectly.
YouTube could benefit from blockchain oracles in many ways. First of all, it can allow the distribution of funds to content creators to be much more streamlined: everything would be run by a smart contract, disrupting all regulation barriers between each country. Just like with Twitch, blockchain oracles can help the most active viewers of a channel have a more weighted vote when the content creator makes polls. YouTube could also reward viewers for watching ads, just like it rewards content creators more based on user ad clicks. Finally, blockchain oracles could make the videos more interactive; the videos could be different or even change depending on certain criteria that can be fed to the oracle. Users could even be rewarded for interacting with the videos, thanks to the oracles!

Hulu: Hulu chose AWS as its cloud provider. AWS is extremely scalable, and offers a streamlined solution for all of Hulu’s data storage and providing needs.

Hulu has 25 million subscribers, with 7.8 million people viewing Hulu with ads. Hulu is one of the top online streaming services, allowing its subscribers to watch many premium TV shows. Some shows are streamed exclusively on Hulu. Hulu + offers live TV to its users, so that they can stream sports from national TV channels such as CBS, Fox or NBC. Hulu allows users to watch live TV directly from their laptop or phone, making Hulu a great option for many families that have chosen to cancel their cable subscription.
Hulu can benefit from blockchain oracles by again rewarding its viewers in real-time. The most active viewers will feed information to the oracle, allowing it to trigger a smart contract which rewards the users. This can also help with more targeted ads for both users and advertisers, mimicking YouTube’s current strategy. Finally, Hulu can make use of oracles to generate more interactive videos, where the ending of the video could be different based on the time of the year or the weather outside. This is of course one of many examples, and the main idea is that blockchain oracles can help bridge the video world into the gaming world.

Netflix: Netflix also chose AWS as its cloud provider. AWS is the largest cloud provider, providing up to 35% of all cloud services globally. This is because AWS is extremely scalable, and overall easy to use. Thanks to AWS, Netflix can focus on other areas of its business, knowing that the viewers will have a great streaming speed provided by AWS.

Netflix has roughly 209 million global paid memberships, with roughly a 10% growth year-over-year. This makes Netflix the leading over-the-top provider for movie and television streaming. Netflix’s secret is that it has its own studios and makes exclusive content for its platform. As of now, Netflix has 5800 content titles in its US library.
Netflix could use blockchain oracles for the same reasons as its counterpart Hulu: for more interactive videos, and to reward its most active users. Netflix could use oracles to trigger smart contracts that reward its most dedicated viewers and fans. Netflix could also use oracle data for analytics purposes, as well as let users vote on what shows Netflix should produce next. Finally, outbound oracles could allow for more interactive videos, if Netflix ever wants to start integrating into the Metaverse or the gaming world.

Conclusion

As the world is getting more and more interconnected, there will be more and more users on the top streaming and video platforms. As it is, more than 50% of Americans use Netflix, and more than half of the worldwide Internet users use YouTube at least once a month. Based on projections and current trends, these numbers will only be increasing.

Streaming and video platforms are already growing at a steady pace, from the side of the content creators as well as the viewers. However, none of the main platforms make usage of blockchain technologies yet. This shows that the video industry is behind on blockchain adoption, as it has been proven that more than 85% of businesses worldwide can benefit from blockchain technologies.

Blockchain oracles could help the main streaming platforms reward their users and content creators in a more streamlined, transparent, and automatic manner. They could allow users and content creators to express themselves more freely, and have better, more reliable analytics if the oracle used is a consensus oracle. The biggest and most exciting feature that a blockchain oracle can bring to the streaming world is bridging the gap between the gaming and Metaverse world to the video content world.

Of course, centralized platforms have very little incentive to integrate blockchain services into their platform. This is because they prefer controlling everything themselves, and overall, a centralized server gives them more control. Yes, a centralized server will crash entirely if it is attacked, compared to decentralized storage which would just slow down if one of its nodes got attacked. Overall, the large platforms provide great services, and content creators as well as viewers have nowhere else to go. So, why change?

Bibliography

Crowder, A. (2019, July 31). Blockchain oracles explained in 2020. Dragonchain. Retrieved January 11, 2022, from https://dragonchain.com/blog/blockchain-oracles

About the Polkastream Web 3.0 Protocol

Polkastream is poised to be the next addition to Web 3.0 by building an integrated and intelligently monetized streaming and gaming platform. Polkastreamers can listen to music and podcasts, watch movies and TV shows, as well as socialize and play over 40 games in the Polkaverse. In return, they are rewarded with $PSTR, which is uniquely designed with incentivization and token-burning strategies for better rewards, long-term crypto market stability, and data security for all digital media users.

Want to learn more?
info@polkastream.io
Website | LinkedIn | GitHub | Twitter | Discord | Telegram | Reddit | YouTube