On-Chain

What Is On Chain?

On-Chain: Refers to actions or transactions that take place directly on the blockchain, where they are recorded, validated, and confirmed by the network. Every transaction is publicly visible and secured by the blockchain's consensus mechanism.

How It Works

1. Directly Recorded: On-chain transactions are those that are added to the blockchain's public ledger. They require network participants (like miners or validators) to confirm the transaction, ensuring that it’s accurate and immutable.
2. Examples:

• Cryptocurrency Transfers: Sending Bitcoin from one wallet to another is an on-chain transaction because it is recorded on the Bitcoin blockchain.
• Smart Contracts: Deploying or executing a smart contract is an on-chain event because its details are stored on the blockchain and can be accessed by anyone.

Example Scenario

If you send Bitcoin to a friend, that transaction is on-chain. It's visible to anyone on the Bitcoin blockchain, and it will require network consensus to confirm that it’s valid. Once confirmed, it’s permanently added to the blockchain, where it can be tracked.

Key Takeaways

• Security: On-chain transactions are highly secure due to blockchain's decentralized nature and cryptographic protections.
• Transparency: Everything is publicly available and can be verified by anyone.
• Immutability: Once a transaction is recorded on-chain, it cannot be changed or reversed.

In simple terms, on-chain is like making a public record of a transaction that everyone can see and verify, ensuring transparency and security.