Blockchain Oracles: Bridging the Gap between On-Chain and Off-Chain Data

Blockchain oracles act as critical enablers that bridge on-chain smart contracts with off-chain data sources, thereby enabling real-world information to affect the operations of blockchains. Since blockchains operate in closed systems, oracles provide the much-needed input for smart contracts to act upon in the outside world for certain events, such as market prices or even weather.

Demand for oracles is at an all-time high, especially now, within industries such as DeFi and insurance. For example, an oracle could fetch rainfall data and automatically enable payouts to be given to a farmer, something transformative. In this regard, services such as Chainlink have become vital when authenticating and verifying data from various sources in a bid to make smart contracts even more reliable and secure.

The more Web3 applications are coming, the more the businesses of the future will need to understand how oracles work. Not only do oracles extend what blockchains can do today, but they make possible seamless interactions between smart contracts and events of the real world to enable innovation in all areas of industries.

What else could be other brilliant ways that blockchain oracles will be used on Web3? Let's discuss.