On-Chain

On-Chain, as the name implies, refers to blockchain transactions that exist on and have been verified to the blockchain by miners or validators.

On-Chain also means that transactions have been recorded to the blockchain.

On-Chain transactions get shared with all of the nodes of a network, as they have been verified and confirmed.

The opposite of an On-Chain transaction is an Off-Chain transaction, which is processed outside of the blockchain, by a second-layer protocol, normally for lower costs and faster confirmation times.

Related Terms

Full Node

A type of node that participates in a blockchain network, performing some function for the network, like securing the network or validating transaction data. A full node stores a complete copy of the blockchain data. Information about every block and the recorded transactions within each block is available in the full copy of the blockchain.

Off-Chain

Refers to blockchain transactions that are processed outside the blockchain. Due to the limitations of on-chain transactions, including a blockchain’s scalability, speed, and cost, off-chain transactions and Layer 2 protocols were introduced to help Layer 1 blockchains deal with congested networks and slow processing speeds.

Lightning Network

A decentralized layer 2 payment protocol layered on top of the Bitcoin network that makes bitcoin (BTC) better by transacting off-chain, or outside of the Bitcoin network. It can handle billions of transactions per second across its network. It can handle billions of transactions per second across its network, providing near-instant financial transactions between platforms and wallets using it together. The Lightning Network can also offer cross-chain atomic swaps, happening off-chain instantly.

Polkadot (DOT)

Polkadot (DOT) is an open-source blockchain protocol for cryptocurrencies, dubbed the “blockchain of blockchains”, that allows different, incompatible networks to communicate with each other and share data, using a multichain design.

Distributed Ledger Technology

A database that is used to record transactions across a network of devices, usually computers or servers. “Distributed” refers to how the nodes (or computers or servers) of the network are designed architecturally, and where they are located geographically. “Ledger” in this context, and traditionally, simply refers to a centralized database that is used to store financial records, such as a company’s financials, liabilities, revenues, owner’s equity, and other financial information. Now, combine the two ideas and you have a ledger that is distributed across many devices, instead of one device, in many different locations, possibly around the world. Even if one of those locations disappears, or a computer or server goes down, the ledger is still intact, still secure, and the data stored within the ledger can still be processed, validated, and authenticated to.