hello world!
Let’s talk about Bitcoin transactions.
While it’s becoming increasingly common for people to have some experience with Bitcoin, that doesn’t mean everyone has a firm grasp of how the Bitcoin network works and how it might differ from traditional banking infrastructure.
Whether you’re new to Bitcoin or are a seasoned veteran, this article is for you.
We’ll break down the basics and provide you with all the tools and knowledge you need to start tracking your own transactions on-chain.
Let’s begin with the basics.
So, how does a Bitcoin transaction work? Basically, when you’re sending Bitcoin, you create a unique transaction with the following bits of information:
After you hit send on your favorite crypto wallet, you broadcast that transaction to the entire Bitcoin network. Miners then compete to validate and add your transaction to the next block in the blockchain.
Once it’s on the blockchain, it’s considered confirmed. That means the transaction is complete and irreversible.
That’s why it’s so important to double-check wallet addresses before hitting send.
Alright, so that’s the barebone basics of Bitcoin transactions. But, how do you track transactions?
Luckily, one of the main features of Bitcoin is the public ledger. This ledger is open for everyone to see, meaning every single transaction is visible. But, if you’re wondering how to look up a Bitcoin transaction on this ledger, you need the right tools.
Here are a few essential Bitcoin transaction trackers, also known as blockchain explorers:
The above are web-based tools that allow you to view the Bitcoin public ledger and find out information about transactions, addresses, and blocks.
All you have to do is enter the transaction ID (TXID), and you’ll see all the information on that transaction. In each transaction, you’ll see:
So, why might you want to track a transaction using a blockchain explorer? Well, the most common reason is to track the status of a transaction. When the Bitcoin blockchain is congested, it can take longer for a transaction to confirm.
Using a blockchain explorer/transaction tracker, you can see exactly where your specific transaction is in the confirmation process.
Want to dig a little bit deeper? Here are a few advanced Bitcoin tracking strategies.
If you want to see if certain addresses belong to the same person or entity, address clustering is your go-to technique. Basically, you’ll look through the blockchain explorer and see how addresses interact with each other.
For example, if two addresses frequently appear as inputs in the same transaction, they are likely controlled by the same user. Other techniques, such as filtering for change address detection and behavioral patterns, can further refine clustering accuracy.
This technique takes blockchain data and transforms it into a physical graph. The idea is to see how each transaction connects to each other via nodes.
Each node represents a Bitcoin address, and each edge represents a transaction between two addresses. When you analyze this graph, you can see patterns and connections that might not be as obvious when looking at individual transaction data.
Tracking transactions can feel daunting at first. I mean, we’re not all computer scientists here. But, with a few best practices under your belt, anyone can browse the blockchain with ease.
Let’s explore a few of those best practices now:
Before we wrap up, we need to touch on some challenges you might encounter when tracking Bitcoin transactions.
First, remember that the Bitcoin network is decentralized and partially anonymous. That means while you can see all the transactions associated with an address, you may not know who actually controls it.
This can make it difficult to connect your findings with a specific individual or organization.
Additionally, mixing services exist to further muddy these waters. These mixing services, also known as tumblers, take Bitcoin from many sources, mixes them together, and send them back to a different address. As you might imagine, tracking transactions through a mixer is incredibly difficult.
Next is the problem of innovation. Sure, there’s a lot to love about how fast the crypto space is evolving, but when it comes to tracking and transparency, there will always be new obstacles to overcome.
For example, emerging technologies like zero-knowledge proofs* (learn more at toc.csail.mit.edu) and privacy coins can make transactions that much harder to track.
Finally, you should understand the ethical and legal considerations of tracking transactions.
For most of us, tracking our own transactions is about as far as we go. But, for others, it can go a bit deeper. In some cases, transaction tracking may be restricted by privacy laws or other regulations. There are also ethical questions about the appropriate use of transaction tracking and the potential for misuse.
So, there you have the ins and outs of tracking Bitcoin transactions. This can be a highly valuable skill if you’re constantly sending coins and want to know how each specific transaction is going.
You can even track your transactions from a Bitcoin Depot location. Once you make your purchase at a Bitcoin ATM, you can use the given transaction ID on a Bitcoin transaction tracker like blockchain explorer and see how many confirmations the transaction has.
This can give you an idea of how long the transaction might take.
But first, you need to find your nearest Bitcoin Depot location. We make that part easy. With over 8,400 locations (as of February 2025) across the U.S., Canada, and Puerto Rico, you’re never too far away from a seamless cash purchase of Bitcoin.
Get to your nearest Bitcoin ATM today to get started.
*The information provided above is for informational purposes only. The inclusion of any particular 3rd party site does not imply an endorsement, sponsorship, or partnership between Bitcoin Depot and the 3rd parties listed above. While Bitcoin Depot endeavors to ensure the accuracy and relevance of the information provided, we do not guarantee the reliability of any 3rd party’s information.
Note: This article was updated on 2/12/25, original post date 4/9/24