Blockchain oracles are external agents that connect blockchain networks with data sources outside of these networks.

Types of Blockchain Oracles

There are two main types of blockchain oracles: software oracles and hardware oracles.

Software Oracles

Software oracles are software programs that run on servers and can pull data from external sources such as APIs, websites, and databases. These oracles can be customized to retrieve specific types of data and can operate on a range of different blockchain networks.

For instance, software oracles can be used to retrieve real-time market data for the purpose of executing smart contracts when certain market conditions are met. They can also be used to pull data from IoT devices, verify user identity, or collect information on supply chain transactions.

Hardware Oracles

Hardware oracles, on the other hand, are physical devices that are designed to interact with the physical world. These oracles can be used to monitor environmental conditions such as temperature, pressure, and humidity, or to verify the authenticity of physical goods.

For instance, a hardware oracle can be used to track the temperature of a shipment of perishable goods as it moves through the supply chain, and trigger a smart contract to execute when the temperature falls outside of an acceptable range.

Sub-Types of Blockchain Oracles

There are also several sub-types of blockchain oracles, including inbound oracles, outbound oracles, and consensus oracles.

• Inbound oracles are used to bring external data into a blockchain network.
• Outbound oracles are used to transmit data from the blockchain network to external sources.
• Consensus oracles are used to verify the accuracy of data by requiring multiple sources to agree on the same information before it is accepted as valid by the blockchain network.

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