If you’re new to Bitcoin, one of the first things you’ll likely encounter is the block explorer or blockchain explorer. Essentially, these are online tools that provide cryptocurrency users with information on the contents of individual transactions and blocks available on the blockchain.
The primary goal of a Bitcoin block explorer is to offer unbiased real-time reporting on Bitcoin blocks. In fact, you can view block explorer as a Chrome or Firefox for browsing blockchain-based assets. In this article, we’ll elaborate on what block explorers are and what you can do with them.
The Origins of the Block Explorer
We’ve established that a blockchain explorer is a search engine for a specific blockchain network. You can use it to get all kinds of information associated with online Bitcoin wallet addresses or transactions.
But what are the technical aspects of this cryptocurrency tool? From a purely technical perspective, block explorer is software with an API and blockchain node. It leverages the data the users search and presents it in an understandable layout.
However, to get an even better understanding of the definition of block explorer, we should take a closer look at why there was a need for it in the first place. The idea of block explorers arose simultaneously with the rise of blockchain technology. Users required a tool to resolve specific difficulties associated with verifying transactions. Additional software became necessary to ensure better access and readability of that information.
The first blockchain explorer was, of course, tailored for Bitcoin, and it went live in 2010. We’re talking about BlockExplorer.com, where you can find real-time statistics for the Bitcoin blockchain.
Who Uses Block Explorer?
Anyone who regularly buys and sells Bitcoin and other cryptocurrencies will utilize the blockchain explorer to check the status of their transactions. Naturally, traders and almost all crypto users depend on it.
When a user initiates a transaction, an automatically generated hash will be created. They can use the hash to check the details of the payment. However, it’s not just the Bitcoin users and traders that benefit from the blockchain explorer.
Bitcoin miners use it to confirm a specific block activity. The explorer can confirm if they were successful in creating a particular block.
If they were, it means they will receive the block reward. Many crypto enthusiasts use block explorers to track the market activity for Bitcoin, Ethereum, Litecoin, and other cryptocurrencies.
What Else Can Block Explorer Tell You?
The primary purpose of a block explorer is to allow transparent tracking of all cryptocurrency transactions. You don’t have to wait for the confirmation that a transaction was completed. If it happened, you’d be able to see it on any block explorer.
Fun fact: You can find Block #0 or the “genesis” block on any block explorer today. It’s dated January 3rd, 2009, and it had only one transaction.
Here are a few other things you can do with a block explorer:
Market Data
Block explorers provide an overview of the value and size of Bitcoin and other cryptocurrencies. This data helps investors and analysts to track and understand the performance of the currency.
The market cap represents the total value of a specific cryptocurrency. The circulating supply takes into account the total number of Bitcoins or tokens which are traded and held in public.
Also, there’s the max supply which is the maximum number of any coins from a particular cryptocurrency that can ever exist. In the case of Bitcoin, that’s 21 million.
Mempool Size
If you’re not entirely familiar with the Bitcoin glossary yet, mempool is a Bitcoin transaction “waiting area.” When a node verifies a transaction, it sits inside the mempool until a Bitcoin miner picks it up and places it into a block.
A Bitcoin block explorer can help you track the aggregate size of transactions awaiting inclusion in a particular block. The size of the mempool serves as a proxy for the activity volume on the blockchain.
Estimated Hash Rate
If you’re interested in Bitcoin mining, a block explorer can be very helpful too. It can give you predictions for computing resources used by miners in a blockchain. In essence, you can have a visual representation of the estimated hash rate.
Latest Blocks
Finally, a block explorer can tell you everything you need to know about the latest block functionality. It can outline the confirmed blocks and provide information about the size, height, and timestamp.
Benefits of Block Explorers
We’ve covered the main functionalities of a block explorer, but at the end of the day, what matters is how you use it. Here are a few reasons why you should focus on using a blockchain explorer:
- The transparency factor when checking balances and expenditures.
- You can use blockchain explorer to verify the validity of a Bitcoin wallet address before sending funds to someone.
- Another aspect of block explorer is the ability to explain discrepancies in transactions. It can help users find setbacks in different stages of confirmation.
- In the context of cryptocurrency wallets, block explorers can help developers identify the need for additional features for their software.
- Most importantly, blockchain explorers are excellent tools for making decisions regarding investments in Bitcoin mining in the future.
Some Disadvantages of Block Explorers
Bitcoin block explorers, as well as other blockchain explorers, are undoubtedly beneficial in many ways. It’s challenging to imagine Bitcoin trading or Bitcoin mining without them.
Some challenges have evolved around them, though. Primarily, that they’re packed with so much data. In some cases, this can become overwhelming for an inexperienced user.
When you get a better understanding of all the data included, they start to make more sense.
Knowing how to comb through and utilize all the information blockchain explorers use will remove any reluctance to use them.
Using a Block Explorer to Your Advantage
Saying that a block explorer is a fundamental tool for Bitcoin trading and mining would be accurate. It offers flexible use of blockchain functionalities and doesn’t require any programming expertise. If you’re an aspiring blockchain professional, learning how to make the most of block explorers is essential.
Having access to real-time transactions is one of the significant benefits of this decentralised network. Plus, you get to explore the history of cryptocurrency using these cryptocurrency browsers.
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GUEST AUTHOR
Hitesh Patel
Hitesh is a digital marketing strategist and entrepreneur with more than 15 years of experience in digital marketing, start-ups, branding, and customer acquisition strategies. Hitesh is the CEO and Founder of Reposition Group, which specializes in digital growth strategies for companies in the cryptocurrency market such as Bitamp.com.
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