The Oracle Problem refers to the challenge of connecting real-world data to blockchain systems in a secure and reliable manner. Blockchains operate in a closed environment, meaning they cannot access external information on their own. This limits their ability to interact with real-world events, which are crucial for various applications.Oracles act as intermediaries that fetch and provide off-chain data (information not stored on the blockchain) to smart contracts. For example, an oracle could deliver weather data to a decentralized insurance application that pays out claims based on specific weather conditions.The issues arise from the trust and security of oracles. If users rely on a single oracle and it provides false data, it can lead to incorrect outcomes in smart contracts. This creates a central point of failure. To address this, decentralized oracles, which aggregate data from multiple sources, are being developed to enhance reliability and reduce the risks associated with any single data point.