On-Chain
On-Chain Key Points
- On-chain refers to transactions and other actions that occur directly on a blockchain network.
- On-chain transactions are transparent and immutable, meaning they can’t be altered or deleted.
- These transactions are validated and recorded on the blockchain by miners in the case of cryptocurrencies like Bitcoin.
- The process often involves a fee and can take time due to the need for network consensus.
- On-chain actions are in contrast to off-chain actions, which take place off the network and are not publicly recorded.
On-Chain Definition
On-chain refers to all transactions and operations that are conducted directly on a blockchain network and are validated and recorded on the network’s main ledger. Unlike off-chain transactions, on-chain transactions are publicly visible and cannot be modified or erased due to blockchain’s decentralized and immutable nature.
What is On-Chain?
On-Chain pertains to all activities that are executed directly on the blockchain.
These activities include transactions or smart contracts that are verified and added to the blockchain ledger.
As such, any operation that is performed on-chain becomes a permanent part of the blockchain history.
Who Uses On-Chain Transactions?
On-Chain transactions are used by anyone interacting directly with a blockchain network.
This includes cryptocurrency traders, miners, blockchain developers, and businesses leveraging blockchain technology.
When are On-Chain Transactions Used?
On-Chain transactions are used whenever a user wants to make a transaction or execute a smart contract directly on the blockchain.
This can occur anytime a user wants to send cryptocurrency, create a new token, or execute a pre-set contract.
Where are On-Chain Transactions Recorded?
On-chain transactions are recorded directly on the blockchain.
This ledger is distributed across the network, ensuring transparency and security through decentralization.
Why are On-Chain Transactions Important?
On-chain transactions are important because they provide a transparent, secure, and immutable record of transactions.
They are crucial to the functioning of any blockchain network, enabling trustless, peer-to-peer transactions and the operation of decentralized applications.
How Do On-Chain Transactions Work?
An on-chain transaction begins when a user initiates a transaction on a blockchain network.
The transaction is then broadcasted to the network where miners (in Proof-of-Work systems) or validators (in Proof-of-Stake systems) verify it.
Once the transaction is verified, it is added to a new block on the blockchain.
This block is then appended to the existing blockchain, making the transaction a permanent part of the ledger.
The transaction is considered successful once it has been included in the blockchain.