What Is a Blockchain Oracle? A blockchain oracle is a secure piece of middleware that facilitates communication between blockchains and any off-chain system, including data providers, web APIs, enterprise backends, cloud providers, IoT devices, e-signatures, payment systems, other blockchains, and more. Oracles take on several key functions: Listen – monitor the blockchain network to check for any incoming user or smart contract requests for off-chain data. Extract – fetch data from one or multiple external systems such as off-chain APIs hosted on third-party web servers. Format – format data retrieved from external APIs into a blockchain readable format (input) and/or making blockchain data compatible with an external API (output). Validate – generate a cryptographic proof attesting to the performance of an oracle service using any combination of data signing, blockchain transaction signing, TLS signatures, Trusted Execution Environment (TEE) attestations, or zero-knowledge proofs. Compute – perform some type of secure off-chain computation for the smart contract, such as calculating a median from multiple oracle submissions or generating a verifiable random number for a gaming application. Broadcast – sign and broadcast a transaction on the blockchain in order to send data and any corresponding proof on-chain for consumption by the smart contract. Output (optional) –  send data to an external system upon the execution of a smart contract, such as relaying payment instructions to a traditional payment network or triggering actions from a cyber-physical system.