Additional data or information that can be attached to encrypted transactions on the blockchain is referred to as metadata in blockchain transactions.

Although the primary function of the blockchain is to record and verify the transfer of digital assets, including cryptocurrencies like Ethereum or Bitcoin, metadata enables users to add extra information or context to their transactions.

Metadata is data about data. In the context of blockchain transactions, it includes information not directly related to the transfer of cryptocurrency but can provide additional functionality to the transaction.

There are mainly two types of metadata in blockchain transactions:

On-Chain Metadata

Since this metadata is stored on the blockchain immediately, it becomes part of the transaction data stored there. Anyone with access to the blockchain can view it. Information such as transaction labels, notes, or references to external contracts or documents can be found in on-chain metadata.

Off-Chain Metadata

This data is referenced in the transaction but not stored directly on the blockchain. Off-chain metadata may include links to additional content, such as files, documents, or web URLs that provide more details about the transaction. Off-chain metadata is a tool users can leverage to reduce blockchain clutter.