Off-chain protocols are solutions that handle transactions or computational tasks outside the main blockchain ledger, with only periodic or summary interactions recorded on-chain. These protocols are designed to improve scalability, reduce transaction fees, and enhance privacy for blockchain networks. Examples include payment channels like the Lightning Network and sidechains. They process a high volume of operations more efficiently than the main chain.
Context
News frequently discusses off-chain protocols as vital components for addressing the scalability limitations of many foundational blockchains, particularly Bitcoin and Ethereum. The security implications and design complexities of these protocols are often subjects of technical analysis and debate. Continued development focuses on making off-chain solutions more robust, user-friendly, and seamlessly integrated with on-chain activities.
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