Blockchain Oracle
Service that brings real-world data onto the blockchain for smart contracts.
A blockchain oracle is an intermediary service that transfers data from the real world (prices, time, sports outcomes, election results) onto the blockchain where smart contracts can use it.
Why oracles are needed: A blockchain is an isolated system — it cannot access data outside its ecosystem on its own. A smart contract executing the condition "if BTC price is below $50k, do X" must receive that price from a reliable source.
Most popular oracle: Chainlink (LINK)
Oracle problem: If an oracle sends incorrect data, a smart contract executes based on false information — can lead to massive losses.
Use cases: lending protocols (collateral prices), prediction markets, insurance, derivatives.