Blockchain oracle

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Blockchain is a digital ledger for pulling together transactions helping minimizes the cost and delays of using third-party intermediaries for financial. A blockchain oracle is a service that provides external data to smart contracts, enabling them not only to fetch data from other blockchains but. A blockchain oracle is a third-party service that connects smart contracts with the outside world, primarily to feed information in from the world.

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Solving the oracle problem is of the utmost importance because the vast majority of smart contract use cases like DeFi require knowledge of real-world data and events happening offchain. A centralized oracle is controlled by a single entity and is the sole provider of information for the smart contract. Without blockchain oracles, smart contracts would have very limited use as they would only have access to data from within their networks. For example, prediction market Augur would use election data to settle corresponding bets.