How to Read a Blockchain’s Transaction History
|– Blockchains are public ledgers, meaning anyone can see all transactions ever made|
– You can use Block Explorers to easily navigate and search your transaction history
– A transaction’s main elements are: the Transaction ID, the sending & receiving address, the associated fees and the transaction’s status
– Ledger Live allows you to easily access blockchain explorers for each transaction
Cryptocurrencies are known to be completely transparent and that all transactions are verifiable. However, not everyone might know exactly how this works. Today, we’d like to show how you can start verifying your transaction history and balances for yourself through a block explorer.
Don’t Trust, Verify: Transactions are there for all to see
Cryptocurrencies like Bitcoin are very unique when comparing them to traditional money. They make use of a technology called blockchain. This is, in short, a distributed ledger of all transactions. What this means is that all the transactions ever made for each cryptocurrency are recorded on a single blockchain, holding its entire history.
Remember how you would keep your receipts and check your bank account each month, just to make sure that all transactions on it were correct? Or perhaps you just trusted your bank instead. Well, with cryptocurrencies, you don’t need to trust anyone – there are no third parties involved. Nearly all cryptocurrencies use public blockchains, where every detail of each transaction ever made can be seen.
What does this mean for you? Well aside from being able to see how much richer others might be than you, it actually serves a very valuable purpose: you can verify each transaction you’ve ever sent or received. If you feel like the service you are using isn’t showing the correct amount of Bitcoins, you can take a look for yourself and see whether it matches. Also if your friend “promised he made the transaction already” even though you haven’t received it, you can check the validity of their claim directly on the blockchain itself. As the famous saying goes: “Don’t trust, verify” – with cryptocurrencies, you can verify everything relating to transactions. So how can you check the entire history of a blockchain?
Block Explorers: Discovering a Blockchain’s entire history
Block explorers are your entry point into seeing all transactions that have ever existed on a blockchain. From here, you can check the balance of each address, see the details of each transaction and more.
There are a lot of different block explorers out there, which makes sense: there are also a lot of different cryptocurrencies out there. Most often, a block explorer only caters to a single crypto asset. Some common block explorers include:
– Bitcoin: blockchain.com & blockstream
– Ethereum & ERC20 tokens: Etherscan & Ethplorer
– XRP: Bithomp & XRP Charts
What these block explorers allow you to do is look up the balance of individual addresses that you enter, or transaction details of any Transaction ID that you fill in. Once entered, you’ll see all the details. For addresses, this includes every incoming and outgoing transaction that the specific address has ever seen. For Transactions, it shows you who sent the transaction, how much has been sent, its destination and the fees that were paid for it. In short, a block explorer is kind of like an encyclopedia for blockchain transactions and addresses – its entire history can be looked up.
How to read a Cryptocurrency Transaction on a Block Explorer
Now to the practical part: let’s analyze a transaction on a block explorer. For those unfamiliar with cryptocurrency transactions, this might seem quite confusing. A mishmash of numbers and letters. Let’s break this down into smaller sections, and go over each separately. Here’s a screenshot from the blockchain.com block explorer for a Bitcoin transaction:
1. The transaction Hash ID
The transaction hash, also known as the Transaction ID, is the identifier of this specific transaction. In simpler words: it’s the code associated with this transaction. If you ever want to look up the details of a certain transaction, you’ll need to enter this string of code into a block explorer.
2. The sending address(es)
This section shows which address is sending cryptocurrencies associated to it, as well as how much it is sending. You can also click on the address to see its incoming and outgoing transaction history.
When you make a Bitcoin transaction, you will automatically send the full amount from your address with the rest sent to your change address. Let’s take a closer look at that:
In this example, your address has a balance of 1 BTC. You want to send 0.1 BTC to a friend of yours. When you create a transaction, you will send the entire balance of your address. Of course, this doesn’t all go to your friend. They receive the 0.1 BTC as intended. The remaining 0.9 BTC is sent to your change address. This address is fully in your control. This is unique to Bitcoin and its derivatives – Ethereum and XRP wouldn’t send out the entire balance of an address, for example.
3. The fees
Most cryptocurrency networks have fees associated with transactions. Bitcoin is no different in this. In this section, you can see how much the transaction has cost in fees. These fees are paid to those validating blocks for the network, which are filled with transactions.
4. The receiving address(es)
In this section, we can see which addresses are the intended destination of a transaction. For each address, we can see how much they are receiving. Similarly to the sending address, you can click on the receiving ones to see their transaction history. Usually the bottom of these addresses is the previously explained change address.
5. The transaction’s status
An often overlooked, yet very important part of a transaction: its status. For a transaction to be completed and considered valid, it first needs to be confirmed by those validating them. An unconfirmed transaction like the one shown above can still be ruled invalid or cancelled. It’s best to consider unconfirmed transactions as “not received yet” and wait till it’s actually confirmed.
It is possible to see more than one sending or receiving address as well. This’d be through a more advanced feature known as “Transaction batching”. This is a commonly used feature by cryptocurrency exchanges, where they’d send cryptocurrencies to multiple people through a single transaction to reduce fee costs.
Ledger Live and Block Explorers
Whenever you start up Ledger Live, it synchronizes with blockchains to check for any new transactions or changes to your balance as well as how much your cryptocurrencies are currently worth. It updates this frequently when in use as well, to make sure it remains up to date.
However, it’s also important that you can check all the details of your past or incoming transactions. When you click on any transaction shown in Ledger Live, it will already show you the details. We do, however, also give you the opportunity to check a block explorer here so you can verify it there as well. This can be done by clicking on “View in Explorer”. You can from there also continue to check your address’s balance and verify that Ledger Live is showing the correct amount. In case of any outage in Ledger Live, a block explorer will always be able to show you how much of a certain cryptocurrency you currently have.
With Ledger Live, we empower you to easily look up your balances – even when not using your hardware wallet. And it can do so much more – learn more about its powerful features here.