What Is A Blockchain Explorer?

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What Is A Blockchain Explorer?

A Blockchain Explorer is, in many respects, an Internet browser for Blockchain. Similarly to Chrome, Firefox or Edge, a Blockchain Explorer helps users search for content, mainly transactions, of Bitcoin, Ethereum, and other cryptocurrencies. While these engines are vital for the smooth running of Blockchain technology, very few people know they exist, and even less appreciate their full potential.

By reading this guide you will be able to understand what Blockchain Explorers are, as well as how you can use them for more than just searching for transactions.

What is a Block Explorer?

A Blockchain Explorer, sometimes referred to as a Block Explorer, is a website which provides you access into blockchains, allowing you to carry out various processes, including searching for transactions. These explorers are specific, meaning that each explorer works only for a specific blockchain, such as Bitcoin. To search through another blockchain, such as Ethereum’s Smart Contract blockchain, you’d need a separate explorer.

By using Block Explorers to search for transactions you will be able to find:

  • A list of all the latest blocks and associated transactions
  • Information about all and any transactions and their current state
  • Sender and receiver wallet addresses
  • Other information, such as statistics and charts

Block Explorers are also useful in checking the history of any public cryptocurrency address, giving you the ability to check the transactions it received and its balance. In certain cases, you might also be able to identify which mining pool added a recent block, although this information is not always available.

Crypto enthusiasts can even search back for the genesis block of respective cryptocurrencies. This block is the very first one to be created when the Blockchain is launched. Therefore, you can even view Satoshi Nakamoto‘s Genesis Block for Bitcoin.

Why Block Explorers Matter

When you first see the search results of a Block Explorer you might think it’s just a lot of random data, especially if you are new to cryptocurrency. In reality, all the content makes sense, once you start to understand what it means.

A Blockchain Explorer provides you with a list of the latest blocks of a particular blockchain. When a new block has been added to the blockchain by miners, it should be listed almost instantly on the explorer. By clicking on any individual block you will see information regarding its size, its creation date and the transactions held within it.

In addition to all this useful information, you will also be able to find the hash of each block. Together with the hash, you’ll be able to find a link to blocks which came before, each with their own unique hash and transactions.

By using a Block Explorer you can view how the reward for each block is divided since the first transaction of each block is the revenue earned by the successful miners. All the other transactions within the block refer to transfer of coins between users along with fees used to carry out and verify that transaction. Generally, this information is not valuable to most people, but it can become valuable for specific entities, such as persons involved in a particular transaction of law enforcement agencies.

Not all Block Explorers have been created equal, so while some might only provide you with basic information, others, such as Blockchain.com, provide you with statistical charts which relate to the blockchain they are based on. By using these explorers you should be able to search for Transaction IDs and wallet addresses, which means that you can search for transactions which were made from or to your own cryptocurrency wallets.

How do You Use a Block Explorer?

Using a Block Explorer varies depending on which platform you use. The following example uses Blockchain.com’s website, as it is one of the easiest to use.

Step 1

Start by loading the website and entering the hash code in the search box at the centre of the screen. For a transaction which you were involved in, you should be able to get this code from your wallet. Alternatively, you can search from a list of the most recent transactions. Once you have pasted the code, click on Search.

Screenshots are shown for illustration purposes only. Actual product may vary.

Step 2

As long as the hash code is correct, the next page should show you all the details of that particular transaction. If it is a very recent transaction, its status might appear as unconfirmed. Together with the details of this hash, you will also find information about related hashes if you continue scrolling down.

Screenshots are shown for illustration purposes only. Actual product may vary.

Which metrics should you care about on Block Explorers?

If you trade cryptocurrencies you should use Block Explorers to gain an undervalued insight into the industry. Statistics and charts provided by these platforms can help you understand how strong the current market trend is, and if a reversal is likely to be coming up. With this information, you can determine whether you should go long or short sell cryptocurrency.

Active Users

Understanding the number of active users on any given blockchain network is an important way to determine interest in a particular cryptocurrency. Taking Bitcoin as an example, the world’s largest cryptocurrency has seen a continual rise of active users since 2009. In June 2019, there were an estimated 40 million users, with 15 million joining in the last year alone.

Transaction Count

The transaction count can again shed light on the popularity of a particular digital currency. Bitcoin, for example, has seen a steady rise of transactions year on year, with an average of 380,000 carried out daily. Concurrently, the number of transactions per block has also seen a constant rise, with each block on the Bitcoin Blockchain currently processing 2,500 transactions. 

Realised Capitalisation

While market caps provide information relating to the total existing number of a cryptocurrency’s coins in existence, realised capitalisation focuses solely on coins in circulation. This corrects for coins which do exist but are lost or frozen, and will probably never be used again.

Market Value over Realised Value

This ratio provides an understanding of the Market Value in relation to the Realised Value of a cryptocurrency. In addition to this ration, many market analysts also consider the z-score of this ratio, which represents the deviation between the two figures.

Network Value to Transaction Ratio

The NVT ratio calculates the dollar value of a cryptocurrency’s transaction activity in relation to the network value. The latter refers to the total market value of all tokens in circulation. The lower the NVT ratio is, the cheaper the cryptocurrency is per unit of on-chain transaction volume. This ratio is similar in behaviour to the P/E ratio, meaning it spikes when a cryptocurrency’s value is greater than the market usage.

Investing with eToro

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Screenshots are shown for illustration purposes only. Actual product may vary.

Gathering, understanding, and analysing this data is only part of the trading process. The next part involves finding the right trading platform to invest with. eToro is a popular platform, not only due to the variety of financial instruments and markets it offers but also due to its combination of supported payment methods and low trading fees. By using eToro to trade cryptocurrencies you get access to extensive historical data which, used in combination with Block Explorer metrics can help you get an edge in the market.

This ad promotes cryptocurrency within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in some EU countries and the UK., no EU consumer protection. Investments are subject to market risk, including the loss of principal.

Do block explorers vary depending on the kind of blockchain?

Different cryptocurrencies run on different Blockchains, so unsurprisingly, different Block Explorers are required. At face value, all explorers operate in a similar fashion, however, in order to provide their information, they are programmed according to the network they operate on.

For example, an Ethereum Block Explorer would operate differently from a Bitcoin one. In Ethereum, gas or gwei is what runs the network. Similar to the Bitcoin transaction fee, one gwei is equivalent to 0.000000001 Ether. Other cryptocurrencies, such as Litecoin, operate under their own, distinct features.

Concluding Thoughts

Blockchain Explorers are a great tool to help you search specific transactions or get an understanding of the broader cryptocurrency environment. Most explorers are free and very easy to use, updated in seconds and full of useful data. Block Explorers are another great example of how Blockchain technology can revolutionise the financial sector, by providing transparency whilst ensuring security. 

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