A New Blockchain Term To Know: Oracle
Oracles turn real world events into computer code on the blockchain so we can know what’s going on
You know, if you spend any time at all in the world of crypto, you come upon the notion of an oracle. What on earth is an oracle and why does it matter? Well, it's real simple. As smart as blockchains are, blockchains - in a fundamental sense, are really pretty dumb because they exist only online. For example, if I program my money to send it to you only if a certain day occurs, meaning I want you to get my money in two weeks. Or only if it rains. Or only if a certain sports team wins a game. Then that's all well and good. But how does the blockchain know that that event occurred? I mean, how does the computer code know that it was raining on Wednesday or that Kansas did win the game? That's what an oracle is. An oracle takes real world events and provides that information to the blockchain so the blockchain can act on it. Because if you think about it, bitcoin doesn't know if it's raining.
So the weatherman in the real world provides that data onto the blockchain so the blockchain knows what to do. That's what an oracle is. And as you would imagine, there are also outbound oracles where something happens within the blockchain, and that information is transmitted to us in the real world so that we know what's going on. Oracles – a fundamental way that the virtual world reacts and connects with the physical world.