How Are ‘Data Feeds’ Secured in an Oracle System?
Data feeds are secured through a combination of cryptography, economic incentives, and decentralization. Cryptographic proofs verify the data's origin.
Economic incentives (like staking and penalizing bad actors) ensure honest behavior. Decentralization across multiple nodes eliminates single points of failure.
Glossar
Economic Incentives
Incentive ⎊ These structures, primarily block rewards and transaction fees, align the economic self-interest of miners with the security of the network.
Cryptographic Proofs
Attestation ⎊ Cryptographic proofs within cryptocurrency, options trading, and financial derivatives serve as verifiable evidence of state or computation, crucial for trustless systems.