What Are Block Explorers and How Do They Work?

One of the most prominent features of cryptocurrency is its transparency. That’s because everything that happens on the blockchain can be verified via block explorers. These online tools (also called blockchain explorers) can be of great use to any crypto investor.

A block explorer’s database is constantly expanding because it records every transaction on a specific blockchain. So, even though the data is accessible, it’s not always easy to find what you’re looking for via block explorer. Still, a blockchain explorer is a mighty weapon for any crypto enthusiast if they understand how to use it and its limitations.

More About Block Explorers

From a technical perspective, a block explorer is a type of Application Programming Interface or API. This software’s only job is to keep all the blockchain data in one place and deliver it in a searchable layout.

Block explorers are not new – they’ve been around since the early days of Bitcoin. As the idea of cryptocurrency developed and expanded, so did the need for a tool that tracks transactions and offers valuable data.

The first block explorer, which is still active, started operating in 2010. It’s aptly named blockexplorer.com and only keeps track of activities on the Bitcoin blockchain.

It’s essential to know that every blockchain comes with its own block explorer. For example, you can’t track Bitcoin transactions using an Ethereum block explorer or vice versa.

Who Uses Block Explorers?

While any crypto enthusiast can use a blockchain explorer, it’s usually day traders and long-term investors that make the most of it.

But also, crypto miners rely on block explorers to confirm a significant block activity. If they’re unsure whether they could produce a specific block and receive a reward, a block explorer can offer confirmation.

How to Use a Block Explorer

Even if you have an idea of what a blockchain explorer is, it might not be entirely obvious how it can be helpful in crypto trading.

If you know what to look for, a block explorer can quickly identify trade-related issues and give you an idea of what other traders and investors are doing. Here are a few examples of how a block explorer can be useful.

Keep Track of Crypto Origins

Did you know that you can find the “genesis” block or Block #0 on any Bitcoin explorer? This transaction took place on January 3, 2009, and contained only one transaction.

So, if you can find the first-ever transaction, then you can find any confirmed transaction. And if you look back on a specific transaction, you can search the crypto wallet address on the block explorer. You’ll get an entire page associated with that digital wallet.

Check the Status of a Single Transaction

On the Bitcoin blockchain, a transaction can be confirmed anywhere between 10 minutes and a few hours. It all depends on the size of the mempool (where Bitcoin transactions are stored prior to being confirmed) and the associated fee.

If you’re unsure if the miners have confirmed the transaction, you can search for it in the block explorer. You’ll need to have a transaction ID, and once it’s entered into the explorer, you’ll see whether it’s confirmed or unconfirmed.

This is probably one of the most popular uses of block explorer. Once a transaction is confirmed, it cannot be reversed, and it stays on the block explorer forever.

Keep an Eye on Cryptocurrency Market Cap

A blockchain explorer can not only tell you about the current average fee for transactions and help miners predict estimated hash rates, but it can also convey the big picture matters.

Correctly utilizing block explorers allows investors and traders to receive updates on how many digital coins exist in circulation. This is important as most cryptocurrencies have a cap on production. For example, there can only ever be 21 million Bitcoins.

The number of coins and other relevant data can paint a picture regarding the overall value of Bitcoin. Interpreting activities on the blockchain accurately can improve trading strategies and increase crypto earnings.

Block Explorer Is a Powerful Tool for All Crypto Enthusiasts

The more you browse through a block explorer, the easier it will get to see how you can use it. The biggest challenge associated with block explorers is the fact they’re so packed with information.

An inexperienced user might find them overwhelming. And to be honest, that’s a very normal reaction to seeing endless lists of transactions.

But a block explorer is searchable, and its primary purpose is to offer information. With some time and effort, it can become something you’ll find useful every day.

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