Oracles in blockchain are bridges between physical or real-life occurrences and blockchain-based smart contracts that retrieve, verify, and pass the information to smart contracts for execution.
What are the types of oracle? In fact, they can take on numerous forms, some of those forms include:
- Software oracles
- Hardware oracles
- Inbound oracles
- Outbound oracles
- Consensus-based oracles
What is the main challenge of oracle? Oracles are third party services that are not part of the blockchain consensus mechanism. Therefore, the main challenge with them is that people need to trust these sources of information, whether it’s a website or a sensor.
- To illustrate, web APIs, market feeds, scrappers, webhooks, hardware sensors, etc. are used as Oracles.
- Some platforms are working towards making consensus-based Oracles protocols, like Delphi, Oraclize, Chainlink.