What is an Oracle?
This is an Article on Oracles.
Simply put, an Oracle is the intermediary between the blockchain and the real world. An Oracle is an application that will source, confirm and relay information from the real world into smart contracts, where it can be stored and used on the blockchain.
Without Oracles, blockchains would only be able to access and use on-chain data! At this point, the blockchain is pretty much useless and would never achieve widespread adoption. It is safe to say we need Oracles!
All kinds of information such as Weather, Sports or Market data can be transferred to and from the blockchain. I think it’s best to use an example to better understand. Let’s use Chainlink, the leading decentralised Oracle as ours.
DeFi protocols that use the Chainlink Oracle are able to access interest rates, price assets, verify collateralization and much more. This gives the DeFi protocols the ability to issue loans at fair market value, settle an options contract and much more that is essential!
There are many use cases for Oracles and there are many types of oracles. We won’t go into detail as we will be here forever, but just note that we can’t achieve global Crypto adoption without Oracles!
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