Oracles are components that connect smart contracts to real-world data. They act as intermediaries, fetching information from outside the blockchain and delivering it to the smart contract.Smart contracts can only operate based on data present on the blockchain. However, many applications require information that exists outside the network, such as stock prices, weather conditions, or sports scores. Oracles bridge this gap by providing the necessary data.There are different types of oracles. Some are centralized, relying on a single source for information, while others are decentralized, using multiple sources to ensure accuracy and reduce the risk of manipulation. The latter is often preferred for increased reliability.Overall, oracles are essential for enabling smart contracts to execute more complex operations by incorporating real-world information, thus broadening the potential applications of blockchain technology.