Off-Chain Transaction

An off-chain transaction is a transfer of value recorded outside the blockchain itself — typically in a provider's internal ledger, or in a channel between participants — rather than broadcast to the network. Sending crypto between two accounts at the same exchange is the everyday example: it clears instantly and often without a fee because nothing touches the chain, only the exchange's database changes. Payment channels and state channels are the trust-minimised version, where the parties exchange signed messages that can be settled on-chain later. The trade-off is that an off-chain transaction is only as good as the party recording it: until it settles on-chain, no independent node has verified that value moved, and you rely on that party staying solvent and honest.