You're absolutely correct that the single largest barrier to mainstream crypto apps is a trustworthy oracle and that it is an extremely difficult problem to solve.
Chainlink is a decentralized oracle framework that recently went mainnet that solves (almost) every issue regarding trustless external data. API providers can sell their data to be utilized as inputs to smart contracts. Large collections of nodes then aggregate this data to maintain decentralization. There are several mechanisms in place to prevent gaming the network (staking collateral, penalties, reputation). The one issue it does not solve is if few sources for the data actually exist. In that scenario, it does not matter if 2 or 200 nodes are reporting the data, as the API itself may provide bad data to the nodes. However, even in this scenario, it would be trivial to assign blame to the API operator, as all nodes would collectively report bad data.
I would encourage you to check out their solution. I'm shilling, but Chainlink is a product that actually works.
Chainlink is a decentralized oracle framework that recently went mainnet that solves (almost) every issue regarding trustless external data. API providers can sell their data to be utilized as inputs to smart contracts. Large collections of nodes then aggregate this data to maintain decentralization. There are several mechanisms in place to prevent gaming the network (staking collateral, penalties, reputation). The one issue it does not solve is if few sources for the data actually exist. In that scenario, it does not matter if 2 or 200 nodes are reporting the data, as the API itself may provide bad data to the nodes. However, even in this scenario, it would be trivial to assign blame to the API operator, as all nodes would collectively report bad data.
I would encourage you to check out their solution. I'm shilling, but Chainlink is a product that actually works.