Oct 9, 2023
about 5 min read
A Complete Guide on How to Read Your Blockchain Transactions
Blockchain transactions are the core of any decentralized network. But do you know how to read them and what they mean?
Blockchain transactions are the backbone of any decentralized network. They record the transfer of value, data, or assets between different parties on a distributed ledger. However, reading them can be a daunting task for those who are new to the technology.
Therefore, in this guide, we will explain the basics of blockchain transactions, how to read blockchain transactions on blockchain, and why they are essential for the security and transparency of the blockchain.
What is a Blockchain Transaction?
A blockchain transaction is a data structure that records the transfer of value, data, or assets between two or more parties on a blockchain network. It comprises several key components, including inputs, outputs, signatures, and a hash.
The process of executing a blockchain transaction begins with the sender(s) broadcasting the transaction to the network. Then, the nodes (computers) run the blockchain protocol to validate the transaction. They verify its validity according to the network’s rules and ensure the sender has sufficient funds to complete the transaction. The block is then appended to the blockchain after reaching a consensus among the nodes.
The transaction becomes irreversible and immutable once confirmed and added to the blockchain. No one can alter or delete it. And its details are permanently stored on the blockchain. This level of security and transparency makes blockchain transactions highly secure and trustworthy.
Locate Your Blockchain Transaction
To locate your blockchain transaction, you must know its hash, corresponding address, or public key. You can then use a blockchain explorer—a tool that searches and views transactions, blocks, addresses, and other information on a specific blockchain network.
For example, suppose you want to locate a Bitcoin transaction. In that case, you can use Blockchain Explorer—one of the most popular and widely used Bitcoin explorers. You can enter the transaction hash, address, or public key in the search bar and click “Search.” After that, you will see a page showing your transaction’s details, including its status, inputs, outputs, fees, size, and timestamp.
Understand Your Blockchain Transaction Details
To understand your blockchain transaction details, you must know how to read and interpret the information displayed on a blockchain explorer. Here are some common terms and concepts that you may encounter when viewing your transaction details:
- Status. Your transaction status indicates whether or not the network has confirmed it. A transaction has been verified and included in a block if confirmed. The number of confirmations indicates how many blocks the network has added after the one containing your transaction. The greater the number of confirmations, the more secure and irreversible your transaction becomes.
- Inputs. The inputs of your transaction show where the value, data, or assets being transferred come from. Each input refers to an output of a previous transaction that has been confirmed on the blockchain and has yet to be spent. It also shows the address or public key of the sender and the amount or type of value, data, or assets.
- Outputs. The outputs of your transaction show where the value, data, or assets being transferred go. Each output specifies the address or public key of the recipient and the amount or type of value, data, or assets they receive. Some may also have special conditions or scripts determining how you can spend them in future transactions.
- Signatures. The digital signatures prove the authenticity and validity of the transaction. The sender(s) generate signatures using their private keys. Anyone can verify them using their public keys.
- Hash. This transaction’s unique identifier is derived from its content using a cryptographic hash function. The hash serves as a transaction fingerprint and ensures its integrity and immutability.
- Fees. Your transaction fees show how much you pay the network to process and validate your transaction. They are usually calculated based on your transaction’s size (in bytes) and complexity (in operations). Fees incentivize the nodes to include your transaction in a block and secure the network.
- Size. The size of your transaction shows how much space (in bytes) it occupies on the block and the blockchain. It depends on the number and type of inputs and outputs and the signatures and scripts involved in your transaction. The size affects how much fees you pay and how fast your transaction gets confirmed.
- Timestamp. The timestamp of your transaction shows when it was broadcasted to the network and included in a block. The timestamp is usually expressed in UTC (Coordinated Universal Time) and may vary slightly depending on the source of the blockchain explorer.
Validate Your Blockchain Transaction
You need to read a blockchain transaction history and verify that it follows the rules and conditions of the network and has been confirmed on the blockchain. To do so, you can use a blockchain transaction tracker to check your transaction’s status, inputs, outputs, signatures, and hash and compare them with the information you have or expect.
For example, suppose you want to validate a Bitcoin transaction. In that case, you can use Blockchain Explorer to check the following aspects of your transaction:
- Hash. You can see if the hash of your transaction is valid, unique, and derived from its content using a cryptographic hash function. You can also see if the hash matches the identifier that you have or expect.
- Status. You can check your transaction’s status on the blockchain to see if it has been confirmed and its number of confirmations. Additionally, you can determine if the network has rejected or dropped your transaction due to low fees or invalidity.
- Inputs. To ensure the validity of your transaction, you can check if the inputs of your transaction are valid and unspent outputs of previous transactions that the network has confirmed on the blockchain. Moreover, you can verify if the inputs match the address or public key and the amount or type of value, data, or assets you possess or anticipate receiving.
- Outputs. Checking the validity of your transaction outputs is crucial. You need to identify the address or public key and the amount or type of value, data, or assets you have or expect. Additionally, you must check for any special conditions or scripts that may affect how you can spend the outputs in future transactions.
- Signatures. To verify that you are the rightful owner of inputs and have authorized the transfer of value, data, or assets to the outputs, you can confirm the validity of the signatures of your transaction. Additionally, you can check if the signatures match the public keys associated with the inputs and outputs.
Final Thoughts on Blockchain Transactions
Reading and understanding blockchain transactions can be challenging for those new to the technology. However, by following the steps outlined in this guide, you can gain a better understanding of how they work and how to read them.
As blockchain technology continues evolving and becoming more widely adopted, understanding blockchain transactions will become increasingly important for individuals and businesses alike. We hope this article has helped you learn how to read your blockchain transactions. If you have any questions or feedback, please feel free to contact us. Thank you for reading!