Metadata in blockchain transactions, explained Additional data or information that can be appended
Metadata in blockchain transactions, explained
Additional data or information that can be appended to a crypto transaction on a blockchain is referred to as metadata in blockchain transactions.
Although the main function of a blockchain is to document and authenticate the transfer of digital assets, including cryptocurrencies like Ether (ETH) or Bitcoin (BTC), metadata enables users to add additional information or context to their transactions.
Metadata is data about data. In the context of blockchain transactions, it includes information that is not directly related to the transfer of cryptocurrency but can provide additional functionality to the transaction.
There are two main types of metadata in blockchain transactions:
On-chain metadata
Since this metadata is immediately stored on the blockchain, it is part of the transaction data that is stored there. Anyone with access to the blockchain can see it. Information such as transaction labels, notes or references to external contracts or documents can all be found in on-chain metadata.
Off-chain metadata
This data is referenced in the transaction but is not kept on the blockchain directly. Links to other content, such as files, documents or web URLs that provide further details about the transaction, can be included in off-chain metadata. Off-chain metadata is a tool that users can utilize to reduce clutter on the blockchain.
How on-chain and off-chain metadata are stored
On-chain metadata, such as transaction details, smart contract code and token properties, is integral to the blockchain’s data structure, being permanently stored and replicated across network nodes. In contrast, off-chain metadata is stored externally, using cryptographic references, enhancing blockchain efficiency and flexibility.
The blockchain’s data structure contains on-chain metadata natively. This information is permanently saved and replicated across all network nodes, and it forms a component of the blockchain’s ledger. The majority of on-chain metadata is kept within the actual transactions. On the blockchain, every transaction has a payload with pertinent metadata. For instance, the sender, receiver, amount and transaction date are recorded as on-chain metadata when sending cryptocurrency between addresses.
When it comes to smart contracts, the contract’s code and accompanying data are kept on the blockchain as on-chain metadata. This covers the functions, state variables and related data of the contract. Each block has headers that provide certain metadata that is easily accessible for verification, like block timestamps, block numbers and transaction IDs. Metadata regarding token properties (e.g., token name, symbol, supply) is frequently maintained on the blockchain for tokens like Ethereum’s ERC-721 and ERC-20.
In contrast, off-chain metadata is stored off the blockchain. It can be kept in a variety of places, including off-chain scaling solutions like the Lightning Network, decentralized storage systems like the InterPlanetary File System (IPFS), and external databases. Blockchain uses cryptographic hashes or pointers to refer to off-chain metadata, which frees up space on the blockchain for larger or less important data storage, lessens congestion and provides flexibility to applications that need private or dynamic information.
Examples of metadata in blockchain transactions
Metadata in blockchain includes timestamps, transaction details, smart contract data, digital signatures, gas fees, IPFS links, oracles’ information and nonfungible token (NFT) metadata, enabling diverse functionalities and information storage within the blockchain network.
Timestamps
A blockchain’s blocks each contain a timestamp that shows the moment the block was added to the chain. The timing of a transaction is recorded via this metadata.
Transaction details
Sender and recipient addresses, transaction amounts and distinct transaction IDs are just a few examples of the metadata that can be included with each transaction on a blockchain.
Smart contract data
Parameters and input data required for the contract’s operation may be included in the metadata when smart contracts are executed on a blockchain.
Digital signatures
To confirm the legitimacy of transactions and demonstrate ownership, metadata contains digital signatures.
Gas fees
On blockchains like Ethereum, metadata may include details regarding the gas fees associated with processing transactions. Miners and validators need this information in order to prioritize transactions.
InterPlanetary File System links
Links to IPFS, a decentralized file storage system, can be found in blockchain metadata. Users can access the data on the blockchain by retrieving a reference, usually in the form of a hash, to the IPFS…
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