External Data Source

Definition ∞ An external data source refers to any information origin that exists outside a blockchain network but is necessary for smart contracts to execute their logic. This can include real-world asset prices, weather conditions, sports scores, or traditional financial market data. Blockchains, by design, cannot access this information directly, necessitating the use of oracles to bridge the gap securely. Reliable external data is crucial for the functionality of many decentralized applications.
Context ∞ External data sources are central to the discussion around blockchain utility, especially in decentralized finance and enterprise applications. News often addresses the challenges of ensuring the accuracy and tamper-resistance of data fed from off-chain environments. The development of robust and decentralized oracle networks remains a critical area of innovation, aiming to expand the types of verifiable external information available to smart contracts.