The transparent nature of Bitcoin and its technology makes it straightforward to look at network data. One way of doing so is by using a blockchain explorer. These valuable tools provide access to many data sets at no additional cost.
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Leveraging Blockchain Transparency
Building a blockchain explorer would not be possible without blockchain’s native traits. This technology is transparent, open, and immutable. Once data is recorded on a blockchain and confirmed by the network, you cannot alter it in the future.
Systems such as Bitcoin and Ethereum ensure all of the information is publicly visible. Every person on this planet has free access to the data and figures flowing through these networks. A blockchain explorer can be a viable tool to make the data more visible and more comfortable to digest.
What Is A Blockchain Explorer?
A blockchain explorer provides a way for anyone to look at past and present network activity for a blockchain ecosystem. It does not apply to just Bitcoin, as every cryptocurrency or public blockchain can provide this transparent access. For Bitcoin, different explorers exist, such as Blockchair, Blockchain.com, et cetera. These platforms offer the same functionality, but some may have better charts and in-depth data analysis.
When using a blockchain explorer, a lot of data becomes accessible to the user. This includes past and current network transactions, the size of network blocks, a block’s hash, the mining difficulty of the network, and so forth. Unlike the traditional financial system, transparency is critical when dealing with cryptocurrencies and blockchains.
“Don’t Trust, Verify” is a common saying in this industry. Thanks to blockchain explorers, everyone can verify the data, rather than trusting data aggregators or other people.
The Technical Aspect
Contrary to what some may think, a blockchain explorer is not just a website. It is a living organism that continually monitors a public blockchain for additional data and statistics. There is a Command Line Interface to interact with this “database” of information to obtain this data. As this is not the most user-friendly way of presenting data, a Graphical User Interface is required. That Interface is the blockchain explorer.
Common datasets to be presented through a blockchain explorer include:
- The current price of Bitcoin in US Dollars
- The current network hashrate – provided through proof-of-Work or proof-of-Stake
- The mining difficulty and next estimated difficulty
- Current and past transactions, as well as the daily network performance
- Mempool size (the mempool is the collection of network transactions not yet processed or confirmed by the network)
- The circulating supply of Bitcoin
- The size of the Bitcoin blockchain
- The number of network nodes
- A lot more details that are intriguing and fascinating
A blockchain network contains many different metrics that all reflect crucial aspects of keeping the network up and running.
Investigating The Bitcoin Rich List
Even in the Bitcoin world, several addresses will have more BTC than the regular user can collect. These addresses are part of the “Rich List,” a metric one can find on websites such as BitInfoCharts. It contains the addresses holding the most BTC, as well as when users last moved funds.
When we take one of the addresses from this list, address “1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF” and enter it into the Blockchair Bitcoin Block Explorer, we can analyze a lot of data.
We are presented with the address information, its balance, and when the address last received a Bitcoin transaction. The block explorer also depicts the number of transactions to data, as well as its QR code.
Below that, we have an overview of the Bitcoin transactions involving this particular Bitcoin address. The value of every transaction can be denominated in BTC or US Dollar. All of the past and current network activity applying to “1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF” is available for analysis immediately.
After clicking on an individual transaction – this one, for example – we can see the block ID of when the network broadcasted it through, the time of the transaction, its fee, who sent it, and whether its privacy score.
This latter metric is found on select block explorers. A higher score indicates it is harder to link this address to an online or real-world identity. This score of 50 is not great, but this transaction may not require a layer of privacy either.
Understanding the intricacies of cryptocurrency and blockchain technology is often considered to be a steep learning curve. That isn’t necessarily the case, thanks to the blockchain explorers and other tools at one’s disposal.
It helps envision the transparent nature of these new financial networks. Additionally, this makes it easier to flag potentially suspicious transactions to prevent fraud and money laundering. It does erode privacy, but developers never built networks such as Bitcoin and Ethereum to provide privacy.