When we think about bitcoin, we assume that it is an anonymous way of transferring money. However, over the past couple of months, a number of companies have built software which can actually track bitcoin transactions. These tracking systems are gaining enormous popularity because they are helping track down illegal and illicit transactions and transfer of bitcoins.
In this post, we will look into the details of how bitcoin transactions can be tracked.
How to track bitcoin transactions?
A number of exchanges offer dedicated servers and block explorers which making tracking of bitcoin transactions possible.
Remember, the blockchain technology offers a great deal of transparency. It is possible for anyone to find out about the transactions that have taken place and entries that have been recorded on the ledger.
In banks, no one can get their hands on your details if you make a transaction. No matter how much you deposit or withdraw, that information is kept confidential. But with bitcoins and blockchain, anyone can look for transaction records based on block numbers, addresses and hashes. Additionally wallet explorers can be used to establish the addresses as well as the wallets which are used to hold the digital currency.
Tracking bitcoins transactions can prove to be useful for senders for making sure that their digital currencies have reached the intended recipient. By using trackers, they can also establish if the transaction has been verified or not.
However, it should also be noted that such tools are useful for law enforcers because it can help them track illegal bitcoin transactions.
What are the benefits of tracking bitcoin transactions?
The tools which are used to track bitcoin transactions can help individuals in a number of ways. For example, if you are a bitcoin investor and make use of crypto exchanges, such a tool can help you find out whether the platform is operational or not. It can also be used to find out the amount of time it takes for a transaction to be verified.
For example, if the tracker shows that there would be long delays when using that particular exchange, you would be much better of choosing another provider. It can help you avoid losses as a result of unnecessary delays.
Investors can also prepare themselves for taxation when using bitcoin transaction trackers. Such tools can help assess your investing performance and in case you mistakenly sent your coins to some unknown person, it will help you track their address.
You can also avoid stuck transactions
Since the inception of bitcoin, bitcoins transactions has increased rapidly and they continue to do as a steady rate. As more and more people are becoming part of the crypto industry, miners give priority to transactions which have higher fees attached to them. Transactions with low fees will be executed, but it may take a very long time. the downside is that the longer it takes for a transaction to be executed, the more chances there are to be outbid and lose the trade altogether.
Miners get an incentive every time they verify a transaction and it is not surprising to see why they give priority to transactions that have a higher fee. So, to improve your chances of getting your transactions verified quickly, you must be willing to pay a little extra fee which is possible to add manually.
Why do the transactions take so much time?
During the transaction finalization stage, confirmation has to be made six times before the coins are transferred to the intended recipient. If there are a lot of transactions taking place at the same time, it could take quite a while to finalize the transaction. Sometimes, it can take up to a day before the transaction is processed.
The blockchain network has the capacity to process a limited number of transactions per second. So if the demand is high, users can expect delays.
Is it possible to cancel bitcoin transactions?
If you didn’t know, transactions carried out on the blockchain cannot be reversed which means that it is not possible to cancel the transactions.
This is why it is recommended that users check the details multiple times before finalizing a crypto transaction. Users must verify the amount they are sending as well as the address. If there are errors, bitcoins can land in a completely different account other than the one that was intended. In such a case, the sender will risk losing their coins.