Blockchain is almost impossible to modify. This makes a problem. This is when the “oracle” problem arises when we can’t modify any information we have a post to the blockchain.
Information on the on-chain after recording it in the blockchain. Blockchain can only proceed if someone records the information on it. There is a possibility that this information will go wrong.
The problem is that unlike the Internet, which is free to delete, in blockchain, it is difficult to modify false or wrong information. In particular, it is even more difficult to reverse when a contract has already been made. Due to the characteristics of a Smart Contract, which automatically signs a contract.
Information in a blockchain means that it is supposedly reliable information, But if wrong external information entered from the beginning, it creates a problem that makes reliable information became unreliable.
Here’s the simple explanation over the Oracle problem in the blockchain
Suppose you buy and sell a bread loaf. There are “fresh bread loafs ” in the blockchain, and a deal if you pay 10,000 BTC tokens, you will get the bread loaf. At that time, the bread seller posted a blockchain network saying the bread loaf is fresh. But if it was actually a bad bread, an “oracle” problem arose over it.
The Smart Contacts will automatically make a transaction for the bread available here and there. This leads to an oxymoronic situation where the blockchain-proven “nothing more than a fresh brad” is a spoiled one.
In summary, the ‘Oracle’ problem occurs when the information entered in the blockchain is inconsistent or omitted by the entry of the information as shown in the above.
The Oracle problem is one of the tasks that blockchain has to solve. This is because there are problems that break trust in the blockchain where trust is the key. This also remains one of the biggest problems in the lightning network.
Currently, various attempts are being made to solve the Oracle problem. There are various methods such as how to pass through holders’ agreement when posting information to on-chain, and how to calculate the median and place it on on-chain. If there’s a complete solution for Oracle problem in any way, the scope of the blockchain will become more diverse.