What is On-Chain vs. Off-Chain?. On‑chain actions are recorded on the blockchain and are transparent and final after confirmation. Off‑chain actions occur outside the chain and are later reconciled or proven.
How it works
Projects mix both: keep critical settlement on‑chain, move heavy computation or private data off‑chain, and use proofs to tie them together.
Why it matters
Balancing on/off‑chain improves privacy, cost, and speed without losing auditability where it matters.
Common pitfalls
- Posting private data on‑chain unnecessarily
- Trusting off‑chain promises without verifiable proofs
- Ignoring data retention and compliance needs
Quick example
An exchange matches orders off‑chain but settles deposits and withdrawals on‑chain for transparency.
See also
- Layer 2
- Oracle
- Block Explorer
TL;DR: What is On-Chain vs. Off-Chain? defined in plain English with practical next steps.
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