A lot of you know LINK cuz it is so popular and you generally know it is an oracle, but do you know what the hell that really means? Or how they actually work? Or how many oracles there are?
What are oracle coins/tokens?
Oracles are decentralised (important) tools to connect the Outside World with the Blockchain world. The terms "load off-chain data into on-chain", which you come across means exactly this.
Why do we need oracles?
Mainly to deploy smart contracts. Oracles give data to smart contracts. Let's not delve into details and summarise that if blockchain gets worldwide adoption, smart contracts are going to be used and oracles will be needed to.
What types of or oracles exist?
Oracles are not confined only to blockchain. Oracles are used also in other applications where data input is needed. Oracles can be hardware, like a thermometer and software (self explanatory).
Why are decentralised oracles important in for blockchain?
If the transactions run on a decentralised system or blockchain, you also need decentralised stream of data that connects to the blockchain. On the other hand, if oracles are centralised, that would force the decentralised network (lets say eth) to be somehow centralised and that would ruin the whole purpose of DECENTRALISATION.
How many oracle coins are there? (rivals of LINK?)
There are in total only 7 oracle coins, where link dominates with market cap of 4.7B $ from the second place Augur only 143.5 M$. That is 32 times the market cap of Augur.
Note that all these oracle coins run on Ethereum except the last one.
How do oracles tokens hold value?
When you use that specific tool (lets say Chainlink) to input real-world data into Chain (blockchain) without abusing, you get rewarded in tokens (example LINK). You must own LINK to be able to input data. And if you are inserting accurate data, you get rewarded in LINK tokens. This also means that if there are parties trying to provide incorrect or inaccurate data, their LINK is lost, or theoretically lost. If one "big group" would be able to centralise this network, then it could really well be abused and manipulated.
