Bitcoin is a decentralized digital currency through which you can perform transactions anonymously. But what if we want to trace some of the transactions? Can a Bitcoin transaction be tracked? So, the answer is yes, we can do it using a variety of methods and equipment. Although Bitcoin provides anonymity but partially not fully. In case of any malicious activity or to stop cybercrime (such as money laundering, and crime payments ) Bitcoin transaction tracing plays a vital role to identify adversaries. Well, in this article we will discuss a few steps to trace Bitcoin transactions by using various tools and techniques. So what are you waiting for? Let's start if you're ready!
How to Trace Bitcoin Transactions [Full Guide]
Tracing a Bitcoin transaction means finding the point from where it originated. Even though tracking a Bitcoin transaction is challenging, it is possible. As we all know that each transaction is stored on the distributed ledger which means all the records are publicly visible to everyone. Although it is publicly available, there is still a problem in that user identity is not directly linked to their Bitcoin address. Due to this anonymity, we cannot directly trace the Bitcoin transaction. We need the right tools ( such as Chainalysis, BlockSeer, Crystal, WalletExplorer, Bigquery, OXT, and BTC.com ) and techniques to trace the origin of the transaction. So, here I'm going to discuss every single step through which you can trace the Bitcoin transaction:
Step 1: Bitcoin Address Identification
For instance, you received a transaction from an unknown Bitcoin address and you want to trace that address. First of all, identify the address and then go for the next step.
Step 2: Open Blockchain Explorer
After identifying the Bitcoin address, open any blockchain explorer (such as Blockchain.info, Blockchain, Bitaps, BTC.com, Etherscan, Finance Explorer, Cardano Explorer, Polkascan, and Solana Explorer) and then enter the identified address into the search bar on any one of the mentioned blockchain explorer.
Step 3: Transaction History
The explorer will display all transaction history associated with that particular Bitcoin address. Through transaction history, you can further evaluate the various activities such as transactions with high Bitcoins, suspicious transactions, and others.
Step 4: Transaction Evaluation
If you want to find further details about any one of the specific transactions from the transaction history then you can go for it. You just have to click any specific history. Then you can find the following details about that particular transaction:
- Transaction hash,
- Inputs and outputs,
- Transaction size,
- Transaction fee,
- Timestamp,
- Block height,
- Confirmations,
- Value,
- and Change address.
Step 5: Tracking a Flow of Funds
To track the flow of transactions and find their origin, you can use the Bitcoin transaction tracing tool such as:
- Chainalysis,
- BlockSeer,
- Crystal,
- WalletExplorer,
- Bigquery,
- OXT, and
- BTC.com.
These tools provide you with a complete flow of funds from where it is coming and where it is going.
Why We Need To Track a Bitcoin Transaction
There are several reasons to track a Bitcoin Transaction such as to ensure the:
- Transparency and Accountability
- Authenticity and Validity
- Compliance and Auditing
- Investigation
- Personal Interest
Conclusion
Overall, Bitcoin transaction tracing is possible by using various tools and techniques. It helps you to identify the flow of transactions as well as ensures security including transparency, accountability, authenticity, validity, compliance, and auditing. A Bitcoin transaction is usually used by the law enforcement agency to investigate and it is also used by a random person in their personal interest. Furthermore, with the help of Bitcoin transaction tracing you can find the transaction history associated with any specific Bitcoin address and you can also further explore any single transaction for the sake of deep analysis.
