In the world of cryptocurrency, a blockchain oracle is a third-party service that provides data to smart contracts on a blockchain. This data can be from the real world, such as the price of a specific asset or the outcome of a particular event.
Blockchain oracles are essential for smart contracts to interact with external data sources. They bridge the gap between the blockchain, which is a closed system, and the outside world. Oracles play a crucial role in ensuring that smart contracts can execute as intended based on real-time, accurate information.
There are different types of blockchain oracles, such as software or hardware-based oracles, which retrieve data from various sources and then feed it into the blockchain. By using blockchain oracles, smart contracts can perform more complex functions and execute agreements that rely on real-world data. They increase the versatility and usefulness of blockchain technology in various applications.
