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i wonder how out of block chain transactions work, because till i know it happens but "is not recommended" (it is what i read on the internet), i want to manage some micro transactions but as it is well known that the fees of each transaction would eat them up so it would be better out of block chain transactions to deal with them?, is there any API that would help me on this?

Thanks in advanced for your time.

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Off-chain transactions are transactions on any system that's not the blockchain. Micropayment transactions, lightning network transactions and even coinbase-to-coinbase or changetip would count as off-chain transactions.

There are API's to the various services. Lightning network is not live yet and micropayment transactions still need settlement on the blockchain.

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  • LN is fundamentally different than the other examples and one could argue they're not off-chain transactions as eventually one of the many transactions that get made does end up on the chain. LN is more akin a caching layer for on chain transactions. Anyway, historically off-chain had meant trusting a third party, which LN doesn't require.
    – Jannes
    Dec 16, 2015 at 11:15
  • Neither do micropayment transactions. The term off-chain simply means that the tx is not on-chain. Obviously for both micropayment tx's and LN tx's you have to publish the finished form in the chain, but all the in-between tx's are not published on the chain, hence "off-chain".
    – Jimmy Song
    Dec 16, 2015 at 22:00

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