Oracle problem

The Oracle problem refers to the challenge in blockchain systems where smart contracts need reliable external data (like prices or event outcomes) to function correctly. Since blockchains can't access external information on their own, they rely on third-party services called oracles. If these oracles provide false or manipulated data, it can cause the smart contracts to execute incorrectly, leading to trust and security issues. Essentially, it’s about ensuring the integrity and authenticity of external data feeding into decentralized applications.