Blockchain Oracles

Description

by Shermin Voshmgir:

"Blockchains and smart contracts cannot access data from outside of their network. In order to know what to do, a smart contract often needs access to in- formation from the outside world that is relevant to the contractual agreement, in the form of electronic data, also referred to as oracles. These oracles are services that send and verify real world occurrences and submit this information to smart contracts, triggering state changes on the blockchain.

Oracles feed the smart contract with external information that can trigger prede ned actions of the smart contract. This external data stems either from so ware (Big-data application) or hardware (Internet-of-Things). Such a condition could be any data, like weather temperature, successful payment, or price fluctuations. However, it is important to note that a smart contract does not wait for the data from an outside source to ow into the system. The contract has to be invoked, which means that one has to spend net- work resources for calling data from the outside world. This induces network trans- action costs. In the case of Ethereum, this would be “gas.” (https://blockchainhub.net/blockchain-oracles/)