Definition ∞ On-chain micropayments are very small value transactions directly recorded and settled on a blockchain’s main ledger. These payments incur network fees and require block confirmation, making them less suitable for extremely frequent, tiny transfers. While direct, their feasibility depends on the underlying blockchain’s transaction capacity and fee structure. They represent direct, verifiable value transfers.
Context ∞ The viability of on-chain micropayments is a recurring discussion point concerning blockchain scalability and transaction costs. While direct settlement offers high security, network congestion often makes it impractical for very small amounts. Debates frequently contrast on-chain micropayments with off-chain scaling solutions like payment channels, which aggregate transactions to reduce fees. Future developments aim to optimize base layer protocols to better support direct, low-cost micropayments.
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