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There is often a need to access information from the outside world that is relevant to the contractual agreement. But smart contracts can’t access data from outside of their blockchain network. An oracle is a way for a blockchain or smart contract to interact with external data.

With blockchains being deterministic one-way streets, an oracle is the path between off-chain and on-chain events. These oracles are services that send and verify real world occurrences and submit this information to smart contracts, triggering state changes on the blockchain.

Inbound oracles bring off-chain or real-world data to the blockchain, whereas their outbound cousins do the opposite: they inform an entity outside the blockchain of an event that occurred on it.

Resources

  1. What is the blockchain oracle problem?.
  2. What is Blockchain Oracle.
  3. Types of Blockchain Oracle.
  4. Tutorial: Getting decentralized price data.

Last update: January 17, 2024
Authors: avenbreaks