What Is an “Oracle” in the Context of Smart Contracts?

An oracle is a third-party service that provides smart contracts with external, real-world data, such as cryptocurrency prices, weather information, or the outcome of an event. Blockchains are deterministic and cannot access this data natively.

Oracles bridge this gap, allowing contracts to execute based on external conditions. A reliable, decentralized oracle is crucial to prevent manipulation and ensure the contract's security.