• In blockchain-based cryptocurrencies, off-chain transactions refer to those that take place outside of the blockchain itself.

  • Off-chain transactions can work by replacing private keys with an existing wallet instead of transferring funds, or using a third-party or coupon-based peer.
  • Off-chain transactions may entail lower fees, immediate settlement, and greater anonymity than online transactions.
  • Depending on the method used, off-chain transactions may eventually have to be registered on-chain.