Lesson

Tracking Bitcoin

Bitcoin transactions all occur out in the open on a public ledger called the blockchain. The technical details are quite complex, but a lot of clever programmers have created ways to peek into that blockchain in useful and interesting ways. Further there are some amazing tools online for tracking the bitcoin economy. Let’s talk about the economy first. If you’re like me, soon after buying your first bitcoin, you’ll find yourself obsessively tracking it’s value in your national currency.

There are a lot of places to do that, but the fastest is by using Google. This is also handy for price conversions like when you know that something costs .0014 Bitcoin, just remember that the symbol for bitcoin is BTC. Also, pretty much all bitcoin centered businesses have at least the current price listed at the top of the page, such as here at bitstamp.net. But there are also site that go much further, with charts and statistics.

As I’m recording this, bitcoin.com, and coinmarketcap.com are pretty useful. Many of these sites also have statistics on other cryptocurrencies. Now let’s talk about tracking movement of bitcoin through the blockchain, which contains all the geeky details of how bitcoin transactions actually get confirmed. But first, a quick refresher. Bitcoin wallets contain bitcoin addresses.

When you send bitcoin, it gets packaged up in the transaction. Then multiple transactions are packaged up into blocks. Addresses, wallets, and blocks are all identified by strings of characters. All that information is public on the blockchain. To see them, just find a blockchain explorer by doing an online search. I like blockchain.info, which has been around for a long time. The first thing we see is the blocks, which contain multiple transactions.

A new block is mined about every 10 minutes, and you can see who successfully solved that block along with other information. By clicking a block you see such details as how much money changed hands, how much the miners earned in transaction fees, and so forth. The first transaction is the mining reward contained within the block. The miner who successfully mined this block gets this bitcoin in addition to the transaction fees.

All the other transactions have input addresses and output addresses, showing who the senders and recipients are. By the way, some wallets let you click on transactions to see their details in blockchain.info, or on another site, or you can simply copy and paste the transaction ID number. As with other blockchain explorer sites, blockchain.info also includes charts and market data too. At the top we have economic indicators like price and market capitalization.

There’s no shortage of information about the current state of bitcoin. I personally find it extremely educational to spend time on these sites, because they introduce me to new ways of looking at the currency, and they help fill in gaps of knowledge that are bound to appear as it grows and changes.