Smart contracts have been known for over two decades but have become realistic only recently with the launch of Ethereum, the Blockchain App Platform. A smart contract is a self-executing digital contract that is written and coded on blockchains. Its execution happens by a digital event, a deadline or in the real world.
In cases where smart contracts require information from external events, blockchain's specific features create an obstacle in connecting smart contracts to off-chain resources. The one thing that helps solve this connectivity issue is called Oracles. In simple language, Oracles are middleware pieces that connect the real world to smart contracts. Many companies today such as SmartContract are investing time, money and effort in building better and high-quality Oracles, so the full potential of smart contracts can be unleashed and seamless connectivity with the real world can be achieved.
Oracles are indeed the connectivity saviour for smart contracts and can revolutionise whole industries primarily the ones that depend heavily on financial agreements. Oracles can be referred to as reliable data feeds that send data to smart contracts and help in lightening their workload.
With the launch of LINK, the first decentralised oracle network, smart contracts can connect to any external resource and gain access to external data that may be required to trigger self-validation and execution of a smart contract. This connectivity removes any manual intervention by any contracting party, saving time and effort.
Any data provider can add to the Oracle database and sell their information for use by smart contracts that need the information. Using Oracles, better data accuracy and network's decentralisation can be achieved.
Today, Oracles serve as a reliable and a solid means of information for smart contracts. However, users and developers of smart contracts are still debating about transferring data through Oracles – especially in solving complex tasks where many data feeds are needed at the same time.
Source: https://medium.com/bethereum/how-oracles-connect-smart-contracts-to-the-real-world-a56d3ed6a507