Oracle Database: PRVF-0002 Could not retrieve local nodename

If you encounter this error while installing Oracle Database 12c:

PRVF-0002 Could not retrieve local nodename

Having a look at Oracle's error documentation it simply tells us:

Cause: Unable to determine local host name using Java network functions. 
Action: Ensure hostname is defined correctly using the 'hostname' command.

Here's how to solve it:

This is the standard file hosts

[root@vm1 ~]# nano /etc/hosts

127.0.0.1   localhost localhost.localdomain localhost4 localhost4.localdomain4
::1         localhost localhost.localdomain localhost6 localhost6.localdomain6

If you ever installed Oracle DB 11g you probably know you need to edit hosts file adding the current machine IP address and hostname. So file hosts resulted in something similar to:

[root@vm1 ~]# nano /etc/hosts

127.0.0.1   localhost localhost.localdomain localhost4 localhost4.localdomain4
::1         localhost localhost.localdomain localhost6 localhost6.localdomain6 
192.168.116.230 vm1 vm1.localdomain

Unfortunately in Oracle DB 12c this is not enough, to solve the error above you need to point loopback address to the machine hostname.

[root@vm1 ~]# nano /etc/hosts

127.0.0.1   vm1 vm1.localdomain localhost localhost.localdomain localhost4 localhost4.localdomain4
::1         vm1 vm1.localdomain localhost localhost.localdomain localhost6 localhost6.localdomain6 
192.168.116.230 vm1 vm1.localdomain

That's all!!