From trust to truth: Advancements in mitigating the Blockchain Oracle problem

Smart contracts gave a new dimension to Blockchain applications. Subsequently, Blockchains evolved from decentralized cryptocurrency ledgers to platforms for developing decentralized applications. A decentralized application needs a variety of data from the real world that cannot be directly provided by smart contracts. Oracles provide a mechanism to input data to the smart contracts for decentralized applications in a trusted manner. Oracles are the entities that collect data from data sources, verify it and then transmit it to the Blockchain. The introduction of Oracles has brought back the issues of centralization, single point of failure and reliance on a trusted third party in the Blockchain ecosystem. Oracles have adopted different means to reduce centralization and achieve some trustless operating mechanisms involving decentralized algorithms based on voting or reputation. In this paper, we analyse the concept of the Blockchain Oracle problem, its effects on various Blockchain applications, various Oracle types and trust mechanisms. We also analyse some of the significant Oracles (like chainlink, provable), and their underlying mechanisms and compare them. In the end, we carry out a gap analysis and discuss some open research issues that must be addressed to achieve robust and secure decentralization.