In order for anything to happen there must be a transaction, in order to cause a change in the blockchain a transaction must run and consume various UTxO’s and output UTxO’s.
A UTxO is a passive thing, it just sits there until a transaction uses it.
On-chain vs Off-chain
On-chain is about validation
Off-chain part lives in the users wallet, it constructs and submits suitable transactions
On-Chain
Validator
A script that takes pieces of information as inputs:
- Datum
- Redeemer
- Context