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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 a blockchain oracle.
  3. Tutorial: Getting decentralized price data.

Last update: January 19, 2024
Authors: kmurphypolygon