Bitcoin Taxes

A Quickstart Guide to Block Explorers

Published
November 14, 2022
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    Blockchains are nothing more than a public ledger of transactions. But have you ever wondered what's in each block? And since they're public, what kind of insights can you glean from them? For example, can you see what successful crypto investors buy in real time? Or, can you determine the largest owners of a specific altcoin?

    Block explorers provide a window into blockchains, enabling anyone to access these kinds of insights – and much more.

    Block explorers enable anyone to filter and search transactions, yielding practical knowledge and actionable insights.

    What is a Block Explorer?

    Block explorers are online tools that allow you to search for real-time and historical blockchain data, including transactions, addresses, or metadata. While each block explorer contains information about one particular blockchain (e.g., Bitcoin or Ethereum), some websites host block explorers for multiple blockchains, providing an all-in-one tool.

    Block Explorers
    Etherscan is the most popular blockchain explorer for the Ethereum blockchain. Source: Etherscan

    Some of the most popular block explorers include:

    Under the hood, block explorers reconstruct and format a blockchain's data into a searchable database. They may also offer an Application Programming Interface (API) for third-party applications to access blockchain data, making it easier for them to build software that analyzes the data and produces actionable insights for traders or investors.

    Why Use a Block Explorer?

    Block explorers are helpful for anyone trying to understand blockchain transactions. You can use them to check the status of a transaction, view the total value of assets held in a wallet, or access your transaction history. In addition, you can access technical information like block difficulty, hash rate, transaction fees, and more.

    Some of the data points you can find include:

    Source: Ethereum

    Investors can also use block explorers to spot trends and opportunities in various markets. For example, you might look at the number of buying versus selling transactions among the most prominent wallets as a signal for overall market sentiment. Or, you might watch transactions into obscure altcoins to find the next hidden opportunity.

    How to Use a Block Explorer

    Block explorers typically feature a search bar that enables you to search for wallet addresses, transaction hashes, or block identifiers. While digging into specific transactions is helpful for miners and individual users, most people use block explorers to track gas fees, glean insights into the overall market, and spot potential opportunities.

    Tracking Gas Fees

    Etherscan's Ethereum Gas Tracker aggregates gas fees from recent transactions to show how much you can expect to pay in real time. You can also see the estimated costs of various Ethereum transactions, such as an OpenSea sale, Uniswap swap, or USDT transfer. These metrics can help you determine how much your transactions might cost.

    Block Explorers
    The Ethereum Gas Tracker is the best way to track gas fees. Source: Etherscan

    Monitoring Addresses

    Monitoring wallet addresses is both interesting and informative. For example, you can see the genesis block of Bitcoin (Satoshi Nakamoto's address) below on Blockchain.com, showing a balance of about $1.4 million worth of Bitcoin. You might also follow other wallet addresses known to belong to thought leaders or successful investors.

    Block Explorers
    The first ever Bitcoin wallet has about 68.5 BTC in it and continues to receive transfers to this day. Source: Blockchain.com

    Finding Token Data

    Transfers into and out of individual blockchains and tokens can help show trends. For instance, many traders look for increases in dollar volume – or the USD value of a coin – to see where investors are putting their money. Block explorers like CoinMarketCap also rank cryptocurrencies by the growth rate in their dollar volume over the past 24 hours.

    Block Explorers
    CoinMarketCap shows trending crypto assets to help traders stay ahead of the curve. Source: CoinMarketCap

    Alternative Analysis Tools

    Block explorers are an excellent solution for digging into blockchain transactions and wallet data. But they're not particularly helpful if you're looking for high-level insights. Fortunately, several applications can help consolidate blockchain data into high-level data points.

    Some popular analysis tools include:

    • WhaleStats – WhaleStats analyzes the top whale wallets across multiple chains, showing you actionable metrics like a fear and greed index, buy versus sell volume, and the most traded tokens.
    • NFTGo – NFTGo tracks more than 1,400 NFT whales, representing about 20% of the total NFT market volume. Among other things, you can see what whales are buying and selling every ten minutes.
    • Clank – Clank provides push notification alerts when large transactions occur in real-time across more than 20 different blockchains.

    The Bottom Line

    Block explorers are a helpful tool for searching blockchain wallets and transactions. In addition, many traders use them to track high-profile wallets, identify trending crypto assets, or double-check gas fees before they mint an NFT or make a transaction. If you don’t already use them, they’re an excellent addition to any crypto investor or enthusiast's toolbox.

    If you trade crypto assets, ZenLedger can help you track your assets, aggregate transactions, compute capital gains or losses, and auto-fill the IRS forms you need every year. You can also use our tax loss harvesting tool to identify ways to save on your annual taxes.

    Sign up and get started for free today!

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