Oracle

An oracle, in the context of blockchains, is a form of middleware used to relay external, off-chain data to on-chain smart contracts. Blockchains’ inability to natively consider external data, known as the oracle problem, necessitates the sourcing and translation of off-chain information by intermediaries known as oracles. An oracle system typically comprises an off-chain data source, a node operator employing software to translate the data, and an on-chain smart contract to receive the translated data. There exists a spectrum of decentralization amongst oracles, ranging from those with a single data source and node to those utilizing a network of nodes reporting data from multiple sources.