Try to imagine using a computer without any internet access to book an airline ticket. It doesn't really matter how many or which operations your computer can perform, it is not able to book an airline ticket unless there is another computer which can accept that booking and which your computer can talk to. The internet is next to useless for booking ryan air flights until ryan air puts one of their computers onto the internet and gives it authority to issue bookings.

Blockchains are like virtual computers. It is absolutely possible to imagine ryan air deploying a smart contract to ethereum and giving it sufficient authority to issue bookings but until that happens ethereum is next to useless for booking ryan air flights. This is the oracle problem.

Here I've focused on the write-path but "the oracle problem" usually refers to the read-path. Say you have some prediction market where participants can place bets on who the next US president will be. How do you resolve that market? When Congress certifies the election they do not publish that certification onto any blockchain. Maybe some day they will. But for now blockchains have to make do with various hacks which allow them to imperfectly track what is happening in the outside world.

> When Congress certifies the election they do not publish that certification onto any blockchain. Maybe some day they will.

The Oracle problem isn't the fact that this doesn't happen today, it's that it can never happen in a way that is trustable. When Congress (or anyone else) does decide to publish the election results to a blockchain, every dollar bet on the outcome will be a prize to be won by anyone who can subvert the publication process.

That doesn't sound right. Nobody talks about the oracle problem in the context of market makers connecting to nasdaq. You're _never_ sure that your counter-party to some communication is who you think they are. The definition of the oracle problem you propose applies to almost the entirety of the modern world and would come up in conversation all the time.

TLS and other measures make me _very_ sure google.com is resolving to a server controlled by Google. A congress who wanted to do so could vote using hardware wallets and publish signatures and we could be just as sure that the blockchain reflected reality. A congress who wanted to do so [1] could declare that henceforth the answer on the blockchain _is_ reality; ryan air could decide that the ethereum smart contract which manages bookings _is_ reality, then there would be no oracle problem even by your definition.

[1] or maybe it would require a constitutional change)

> That doesn't sound right. Nobody talks about the oracle problem in the context of market makers connecting to nasdaq.

I don't follow, one of us is confused about what the other is saying and I'm not sure who. If the Oracle problem were solved tomorrow, one of the first things that would happen is publishing stock prices to ledgers so that derivatives could be implemented in smart contracts, yes?

Anyway, what I'm saying is, whatever real world data you'd like to have on a blockchain ledger, election results or stock prices or sports scores or whatever, the Oracle problem is specifically the fact that you wouldn't be able to trust it if it were there, not the fact that it isn't there yet.

> A congress who wanted to do so [1] could declare that henceforth the answer on the blockchain _is_ reality

This is a workaround - if the value on the ledger is the source of truth, there is no Oracle problem.

All the existing systems we have to solve this area are trust based systems. You trust your browser and OS to choose the correct CAs to trust, and they are the ones that validate to you that google.com is Google. Whole schtick of crypto folks is about reating trustless systems. It is trivial to add real world information to a blockchain if you have an authority that you trust, the oracle problem is how to do that when you don't.

Even the Congress example for who is president, we literally had a bunch of people certify fake election results last election and try to overthrow the US goverment. No matter how much you scream that one day the blockchain will be the reality, that goes agaisnt every single judicial and political system we have in the world, and if you disagree with it, I hope someday somebody doesn't hack your house away from you, cause then you will learn why all proper property systems have judicial systems with actual human beings running on human logic with power to do fixes.

> with power to do fixes.

the implication here is that those powers of the judicial system will always be used to do fixes in your favour. but if that optimism was shared by everyone, blockchains would have never been invented in the first place.

The more you write (talk) about this stuff, the less I understand.

The problem of moving information about the real world (stock prices, weather report, did the Knicks win last night) into a crypto ledger so that it can be speculated upon (e.g. a smart contract that only pays out if the Knicks win).

Using an LLM for such questions is more helpful in my experience

Moving data about within a blockchain is trustless - you don’t need to trust the network to move money. You can set up smart contracts to move money under certain conditions (usually other transactions)

When you want to interface with the real world, say trigger a smart contract on a stock price move - who do you trust to get that data? You’ve reintroduced a trusted authority.

This is the oracle problem. Now, if like me you don’t give a crap and are happy to trust middlemen in your day to day life because I trust banks over random merchants a million times… big whoop. But if you’re a cryptocurrency fetishist it becomes a big deal.

In a nutshell, the oracle problem is, where do you get data to make automated decisions and do you trust that data.