Oracles
Oracles are an essential component of the smart contract and blockchain ecosystem. The limitation with smart contracts is that they cannot access external data because blockchains are closed systems without any direct access to the real world. This external data might be required to control the execution of some business logic in the smart contract; for example, the stock price of a security product that is required by the contract to release dividend payments. In such situations, oracles can be used to provide external data to smart contracts. An oracle can be defined as an interface that delivers data from an external source to smart contracts. Oracles are trusted entities that use a secure channel to transfer off-chain data to a smart contract.
The following diagram shows a generic model of an oracle and smart contract ecosystem:
Figure 10.3: A generic model of an oracle and smart contract ecosystem
Depending on the industry and use case requirements, oracles...
