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Oracle

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Table of contents
    1. 0.2. How Oracles Work
    2. 0.4. Why Oracles Matter

An oracle is a service or tool that brings real-world data into a blockchain, allowing smart contracts to interact with external information like prices, weather, or events.

How Oracles Work

Blockchains are isolated by design, so they can’t access off-chain data directly. Oracles act as bridges, feeding trusted external inputs into the blockchain. They can be centralized (run by a single provider) or decentralized (multiple sources verifying the same data). Popular oracle networks include Chainlink and Band Protocol.

Why Oracles Matter

Smart contracts are only as smart as the data they receive. Oracles make blockchain applications more powerful by enabling real-world use cases, like settling bets, triggering trades, or calculating insurance payouts. Without oracles, blockchains would be limited to on-chain logic only.