How to Read a Decentralized Ledger
As discussed, one of the cool things about decentralized ledgers is that everyone can view every single transaction in real time. For instance, if you go to the Blockchain.com Bitcoin explorer, you will see all of the given transactions at any moment.
Transactions on the Bitcoin Network at 10:58PM on September 7th, 2022
If you click into any of these transactions, you will see details on who is sending the funds, how much they are sending and who is getting paid. Ledger provides a great graphic and writeup explaining this:
Details of a Specific Bitcoin Transaction
Let’s dig into each:
Transaction ID: The “hash” represents the unique ID of each transaction. You can always save this number to look up the specific details later
Sender: This shows the public address of the person sending the BTC and how much they are sending
Fees: Shows the fees associated with the transaction
Receipient: This shows the public address of the person or persons receiving the BTC and how much they are receiving. Note that there is a particular technical quirk of Bitcoin that requires them to send all of your Bitcoin everytime you make a transaction and then send the unused amount back to you. So if Alice had 10 BTC and wanted to send 1 BTC to Bob, she would actually send all 10 BTC out, 1 BTC would go to Bob and the remaining 9 BTC would go back to her.
Transaction Status: Transactions often take several minutes to clear, so this section will often read “unconfirmed” until the transfer goes through
While all blockchains have slightly different formats, virtually every one has a public “block explorer” where you can view the transaction history (e.g. Ethereum’s is at etherscan.io).
Again, the ability for anyone to do this is groundbreaking in that it allows us to create highly transparent organizations that greatly reduce corruption and fraud. Imagine, for instance, if we could see where every dollar our government spent went today!
Even today, authorites are using these public block explorers to track (and often recover) stolen funds from cryptocurrency hacks.
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