A blockchain oracle is a tool that bridges the gap between blockchains and the outside world. It enables smart contracts to access external data that isn’t stored on the blockchain itself. This is crucial because smart contracts need real-world information to execute properly.Oracles can pull data from various sources, such as APIs, price feeds, or even IoT devices. For example, a smart contract for a decentralized insurance policy might require weather data to determine if a payout is necessary. Without an oracle, the contract wouldn’t be able to access that information.There are two main types of oracles: centralized and decentralized. Centralized oracles rely on a single source for data, while decentralized oracles aggregate information from multiple sources, making them more robust and resistant to manipulation.Overall, oracles play a vital role in making smart contracts more versatile and functional by allowing them to interact with real-world events and data.