On Chain - what is it, and what is it for?

On Chain is a term that refers to records (transactions) within a chain that have already been confirmed.

The Bitcoin system, like any other cryptocurrency ecosystem, operates on a unique principle - based on blockchains. This algorithm also determines the technology for generating and confirming payments.

Technically, the confirmation process looks like this:

  • the user creates a transaction request;
  • confirms it with keys (private, public, multi-signature);
  • the transaction must be confirmed at least 6 times - miners do this.

After this, the payment is considered valid, that is, genuine. After this, the transaction data goes into the blockchain code, and this record cannot be changed or deleted. Through this principle of operation, cryptocurrency systems' reliability and security are ensured while the registry is publicly accessible to all community members. If necessary, they can obtain information about any transaction at any point in time since the creation of the cryptocurrency system.

The only drawback of this technology is that, due to problems with code scalability in blockchains, the speed of transactions directly depends on the size of commissions and user activity.