# Overview of Blockchain Oracle Research
## 2 Literature Background
However, given that the second signature has not been inserted, the transaction remains on hold. When the parcel is delivered, the entity in control of the oracle key signs the transaction, allowing for the successful execution of the transaction. Evidently, the choice of the entity that possesses the oracle key plays a crucial role in those types of ecosystems [3]. This is a trivial example of an oracle solution on the  
Figure 2: M-of-N Oracle Example. Bitcoin blockchain implemented in traceability; however, the most commonly used cases belong to the finance/gambling field [41]. A thorough explanation of all oracle types is beyond the scope of this study; however, further information can be found in dedicated papers and web articles listed in references [10; 31; 40; 41]. Given that oracle ecosystems operate in a different way with respect to blockchains, characteristics such as immutability, transparency, and trustless execution are not ensured [42]. This discrepancy in attributes implies that when blockchain-based applications need data from the external world, the characteristics of oracles are to be taken into serious consideration. If the data source is unreliable, the node is not trusted (or private), and the smart contract is poorly audited, the fact that an application runs on the blockchain is practically irrelevant [3; 14; 43]. Depending on third parties, blockchain technology alone cannot represent a solution to centralization, trust, and security issues. This condition, widely explained by blockchain experts such as [PERSON] and [PERSON] [44; 45] and labeled by [PERSON] [41] as \"the oracle problem\", must be considered at the time of integrating blockchain with applications in the area of the supply chain, healthcare, and academic credentials. Various consequences may be faced, depending on the faulty oracle part and the application type [46; 38; 47]. In the healthcare sector, the presence of oracles constitutes another possible source of data breach, exposing patient records to theft or manipulation [48]. In the DeFi sector, the dependency on oracles would expose decentralized applications that rely on centralized or insecure data sources to risk millions of dollars of invested capital [47; 49]. In the traceability sector, blockchain technology has been proposed, relying principally on the misconception that considering that the origin and movement of a cryptocurrency on the blockchain can be traced in a secure and trustless manner, the same can be performed with a tangible asset, such as food, clothes, and medicine [44]. Because the dependency on oracles for real-world applications makes it unlikely to reproduce the same level of tracking accuracy, only a few traceability projects show some robustness against that issue [8; 42]. Lately, with Non-Fungible-Tokens (NFTs) and stablecoin technology, the blockchain-based traceability of tangible products is also following another path [50; 51; 49]. Rather than directly tracking a real product with blockchains, companies are instead creating a representation of those on the blockchain (NFTs) to guarantee genuineness and ownership. Because of the oracle problem, numerous critiques and concerns also arise for other blockchain applications, such as intellectual property rights management, e-government, and resource management [52; 53; 54; 30]. For these applications to run genuinely decentralized and trustless, oracle ecosystems should be structured to ensure the same characteristics as blockchains. However, unlike blockchain technology, which has a history and development of nearly thirty years (considering the work of [PERSON] and [PERSON] [55] as its precursor), oracle ecosystems are relatively newer and unexplored spaces with few actors and limited literature [3]. This is the gap in which this study finds its legitimacy. It aims to shed light on academic contributions concerning blockchain oracles and promote cooperation and progress.