Decentralized Oracle

A decentralized oracle in cryptocurrency is a mechanism that feeds external data to smart contracts on the blockchain. It acts as a bridge between the blockchain and real-world data sources, ensuring that the smart contracts have access to accurate and relevant information.

Unlike centralized oracles, decentralized oracles do not rely on a single source of data. Instead, they aggregate data from multiple sources and use a consensus mechanism to validate the accuracy of the information. This helps prevent manipulation or tampering of data, making the smart contracts more secure and reliable.

Decentralized oracles play a crucial role in enabling smart contracts to interact with the external world, facilitating use cases such as decentralized finance, supply chain management, and prediction markets. By providing trustworthy data to the blockchain, decentralized oracles help increase the utility and efficiency of decentralized applications.