Bitcoin Off-Chain Transactions: Their Invention and Use
Bitcoin off-chain transactions are transactions in bitcoin that are not recorded on the blockchain.1 Today, most bitcoin transactions occur off-chain.2 This dynamic runs counter to the quintessential principle espoused in the initial white paper conceptualizing bitcoin—that transactions would be immutably and reliably recorded on a public ledger.3 As regulators voice concerns over bitcoin’s divorce from its ledger technology, this explainer provides an understanding of this innovation’s implications on privacy, security, settlement speed, and usability.
Georgetown University Law Center, J.D. Candidate 2020; Boston University, B.S. Business and Finance.