How do oracles work?

Take, for instance, you’re building a decentralized application that includes a weather service and real-time sports data, which in this case all require oracles: the “external data source” will be the weather report service and sports data.

The oracle, a third-party integration or software, links and relays data between the smart contract and the external data source, as highlighted above.

A smart contract is a self-executing program based on conditions encoded in its program. The smart contract is triggered to perform its programmed actions when the conditions are met based on the “retrieved external data” from the oracle via the API Call (request).

Afterward, a “return result” call is declared and returned to the oracle, and the circle continues.