Reality Keys is a new decentralized, automated and trust-free service that allows you to monitor a variety of data sources including exchange rates, transactions and 39 million additional topics listed in the Freebase open directory to automatically report whether a given fact is true or false at a pre-configured, specified date and time.
Every fact created generates two ECDSA cryptographic key pairs known as Reality Keys, for example one key for “Yes” and one key for “No” when facts are registered a public key for each possible outcome is generated and released, the private key associated with the actual outcome when result is confirmed through an automated and human verification process, private keys for the outcomes that never come to fruition are never released.
Services are provided free of charge however, for a small fee payable in Bitcoin human confirmation is available in a situation where the data provided by the automated verification was incorrect or compromised.
In financial transactions, data provided can be verified by Bitcoin or any other cryptocurrency through escrow like transactions performed directly over the blockchain without the need for trust of a third party.
Because Reality Keys are compatible with the Bitcoin network you can use them to create transactions payable only on specific outcomes using smart contracts.
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Some examples of categories include but are not limited to Exchange Rates, Blockchains, Sport Results, Personal Goals etc.
The Reality Keys service was created with anonymity in mind and is used anonymously. With the exception of RunKeeper data, they do not collect your name, email address, or other personally identifying information.
Similar to the Augur predictive markets platform, I think that Reality Keys seems more probable to function in practice than Augur, which looks to be susceptible to centralization and breakdown into a single data feed.
Recently, newly-launched Etheropt, a decentralized options exchange built on Ethereum, is using Reality Keys to verify all of its transactions. In my opinion, there will be many more like Etheropt in the future to use Reality Keys in many different ways.
In my opinion, Reality Keys is a modern day oracle in a sense and it boggles the mind when you think of all of the many things you can do with this amazing platform, and can be a very useful tool in the world of trading and investing.