<h1>What is Oracle problem?</h1>
<ul>
<li>The Oracle problems refers to the connectivity issue of smart contract with the off-chain data(such as market-data, api_calls, api-data) with on-chain data.</li>
<li>The oracle problem revolves around a very simple limitation—blockchains cannot pull in data from or push data out to any external system as built-in functionality.</li>
</ul>
For example, financial smart contracts need market information to determine settlements, insurance smart contracts need IoT and web data to make decisions on policy payouts, trade finance contracts need trade documents and digital signatures to know when to release payments, and many smart contracts want to settle in fiat currency on a traditional payment network.
<h1>What Is a Blockchain Oracle?</h1>
<ul>
<li>Blockchain Oracles is any device that interacts with the off-chain world to provide external data or computation on on-chain.</li>
<li>Blockchain oracle is a secure piece of middleware that facilitates communication between blockchains and any off-chain system, including data providers, web APIs, enterprise backends, cloud providers, IoT devices, e-signatures, payment systems.</li>
<li>We will not use centralized computation or centralized oracle/node for our extrenal data.</li>
<li>When a smart contract combines on-chain and off-chain data, can be defined as hybrid smart contract</li>
</ul>
<h1>Now, how this blockchain oracles work!!!</h1>
<ul>
<li>
With the help of decentralized oracle network
</li>
<li>
On off-chain, chainlink nodes will store external data from data-providers.
</li>
<li>
On on-chain, the chainlink node will transfer the data to Reference contract so that other contract can used this data.
</li>
<li>
Here, we will use the chainlink functions to get the external data for our smart contract
</li>
</ul>
For Example, this are the methods and Data feeds provided by chainlink:
<ol>
<li>CHAINLINK FUNCTIONS</li>
<li>CHAINLINK VRF</li>
<li>CHAINLINK AUTOMATION</li>
<li>END-TO-END RELIABILITY(TAKE INPUT, RETURN OUTPUT)</li>
</ol>
For more depth explanation visit👇:
<a href="https://dev.chain.link/" target="_blank" rel="noopener nofollow">https://dev.chain.link/</a>
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The Oracle problem highlights the challenge of connecting smart contracts with off-chain data. Blockchain oracles act as middleware to provide secure external data to blockchains. Chainlink solves this problem using a decentralized oracle network, ensuring smart contracts can efficiently utilize off-chain data.

The Blockchain Oracle Problem!!!

So oracles are basically the middle-man between off-chain smart contract, and on-chain data.

An important concept which we easily apply in web2(fetching data from api).But how we can extract the data from off-chain for our web3 dapp.