External data refers to information originating from outside a blockchain network that is required for smart contract execution. This includes real-world prices, event results, weather conditions, or other verifiable information. Oracles serve as the essential bridge, securely bringing this off-chain data onto the blockchain. Without external data, many advanced decentralized applications would lack the necessary context to operate effectively.
Context
The critical discussion surrounding external data centers on ensuring its integrity, reliability, and censorship resistance when integrated into blockchain systems. Debates frequently address the vulnerabilities associated with oracle dependence and the need for robust decentralization to prevent single points of failure. Future advancements aim to enhance the security and trustworthiness of oracle networks, enabling more complex and reliable smart contract functionalities.
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