How To Read The Bitcoin Blockchain
How To Read The Bitcoin Blockchain - Block Explorers
Bitcoin block explorers are online tools that allow users to view and search for information on the Bitcoin blockchain. They provide a user-friendly interface that allows users to view information on transactions, blocks, and addresses on the blockchain. These block explorers have become an essential tool for anyone looking to gain a deeper understanding of how the Bitcoin network works, as well as for anyone looking to use the blockchain for their own projects.
One of the main uses of a Bitcoin block explorer is to view information on specific transactions. Transactions are the transfers of value between Bitcoin addresses on the blockchain. Each transaction has a unique transaction ID (TXID) which can be used to search for it on a block explorer. Once a transaction is found, a user can view details such as the input and output addresses, the amount of bitcoin transferred, and the number of confirmations.
Another use of a block explorer is to view information on specific blocks. A block is a collection of transactions that are added to the blockchain every 10 minutes. Each block has a unique block number, also known as the block height, which can be used to search for it on a block explorer. Once a block is found, a user can view details such as the number of transactions in the block, the block size, and the block reward (the number of bitcoins mined).
Bitcoin block explorers also provide information on specific addresses. A Bitcoin address is a unique string of numbers and letters that represent a destination on the blockchain. Each address has a balance and transaction history that can be viewed on a block explorer. This can be helpful for tracking the flow of funds on the blockchain and identifying patterns of activity.
How To Read The Bitcoin Blockchain - UTXOs
Bitcoin UTXOs, or Unspent Transaction Outputs, are an important concept in the Bitcoin blockchain. They represent the amount of bitcoin that can be spent in a transaction. In order to make a transaction on the Bitcoin network, a user must reference one or more UTXOs in their transaction. Understanding how UTXOs work is essential for anyone looking to use the Bitcoin blockchain for their own projects or for anyone looking to gain a deeper understanding of how Bitcoin works.
When a transaction is made on the Bitcoin network, it is made up of inputs and outputs. The inputs are the UTXOs that are being spent, and the outputs are the new UTXOs that are created. Each output is a new UTXO that can be referenced in future transactions.
For example, let's say Alice has a UTXO with a value of 10 bitcoins. She wants to send 5 bitcoins to Bob and keep 5 bitcoins for herself. To do this, she will reference her UTXO of 10 bitcoins as the input in her transaction and create two new outputs: one for Bob with a value of 5 bitcoins, and one for herself with a value of 5 bitcoins. These new outputs will then become new UTXOs that can be referenced in future transactions.
UTXOs are also used to ensure the integrity of the Bitcoin network by preventing the double spending of bitcoin. When a transaction is broadcast to the network, it is verified by full nodes. If a full node finds that the input UTXOs have already been spent, the transaction will be rejected.
UTXOs also have an important role in the mining process. Miners include transactions in blocks and these blocks are added to the blockchain. In order to include a transaction in a block, miners must reference UTXOs as inputs. When a block is mined, the newly created UTXOs are added to the blockchain as well.