Jan 10, 2024 3:07:14 PM

What is On-chain in Blockchain?

On-chain refers to transactions and events that are recorded and validated on the itself. These actions are immutable and transparent, meaning once they are added to the blockchain, they cannot be altered and are visible to anyone who accesses the blockchain.

Characteristics of On-chain Transactions

  1. Immutability: Once a transaction is recorded on the blockchain, it cannot be changed or reversed.
  2. Transparency: All on-chain transactions are visible to the public, ensuring transparency within the network.
  3. Verification: Transactions must be verified by network participants (nodes) before being added to the blockchain.
  4. Finality: On-chain transactions provide finality, meaning once they are confirmed, they are considered to be final and irrevocable.

On-chain vs. Off-chain

  • On-chain: Transactions that occur directly on the blockchain and are subject to the network’s rules and mechanisms.
  • : Transactions that occur outside of the blockchain network and are not recorded on the blockchain. These can be faster and cheaper but lack the security and transparency of on-chain transactions.

On-chain Governance

  • Decision Making: In some blockchain platforms, on-chain allows network participants to vote on changes to the directly on the blockchain.
  • Smart Contracts: These are self-executing contracts with the terms of the agreement directly written into code and executed on-chain.

On-chain Analysis

  • Blockchain Analytics: On-chain data is analyzed to understand transaction patterns, wallet addresses behavior, and overall network health.
  • Metrics: Common on-chain metrics include transaction volume, active addresses, and network fees.

Neo Blockchain and On-chain

  • Smart Contracts: On the Neo blockchain, smart contracts are executed on-chain, allowing for complex operations and digital management.
  • NeoFS: Neo offers a distributed file storage system that operates on-chain, ensuring the security and immutability of data.

On-chain activities are fundamental to the operation and of blockchain networks, providing a secure and transparent way to conduct transactions and enforce smart contracts.