Tracking Bitcoin transactions. How the network works

• Transaction request. When a user initiates a transaction, the network generates a block to record it.

• Block confirmation. Network participants, known as miners, verify this block and confirm its validity.

• Addition to blockchain. Once confirmed, the block is added to the chain, and the funds are transferred to the recipient’s wallet.

Each block contains critical information about the transaction, including the sending and receiving wallets, the transaction amount, and the time. The immutable nature of blockchain ensures that no one can alter or delete the stored information, which adds security and transparency to the system. This is how all Bitcoin transactions are securely tracked.

• Public key (wallet address). This is essentially your Bitcoin wallet address, which acts as an account number. If someone wants to send you Bitcoin, they will use your public key to transfer the funds.

• Private key. This is the key that allows you to authorize transactions from your wallet. It’s extremely important to keep your private key secure. If someone gains access to it, they could potentially move funds from your wallet without your permission.

Many Bitcoin users recommend storing private keys offline, either on paper or another secure medium, to avoid the risk of cyber theft. This key is necessary for approving any outgoing transactions from your wallet.

However, while the blockchain shows these details, it does not reveal any personal information, such as names or addresses. This pseudonymity allows for a degree of privacy, but Bitcoin transactions are not fully anonymous. Tools known as blockchain explorers allow users to view these transactions and monitor wallet activity. Popular blockchain explorers include:

• Blockstream

• BTC explorer

• Blockchain.com

With these tools, users can easily follow the flow of Bitcoin across different wallets, though they cannot directly link it to a person’s identity unless additional information is available elsewhere.

When a Bitcoin transaction is initiated, the sender can attach a fee. Miners, who are responsible for processing transactions, prioritize transactions with higher fees. Transactions with low fees may be pushed down the priority list, resulting in delays.

During times of high network congestion, transactions with lower fees can remain unconfirmed for extended periods. It’s essential for users to be mindful of the fee they attach to their transaction to ensure timely confirmation.

1. Replace-by-Fee (RBF). This method is available on wallets such as Bitcoin Core and Electrum. It allows you to resend the transaction with a higher fee, increasing its priority among miners. By adjusting the fee, the transaction is more likely to be confirmed faster.

2. Send a second transaction. If your wallet doesn't support RBF, you can attempt to send a new transaction with a higher fee. The network will often prioritize this transaction, and in processing it, the initial transaction will also be confirmed.

3. Create a new wallet on electrum. For users not using wallets that support fee adjustments, creating a new wallet in Electrum using a seed phrase can give access to tools that help speed up transactions. From there, you can take steps to expedite the process.

While these methods might increase the cost of the transaction, they significantly improve the chances that miners will prioritize your transaction.

Although Bitcoin is sometimes regarded as an anonymous currency, its blockchain offers transparency, allowing anyone to view transaction data, albeit without personal details. Understanding how Bitcoin transactions are processed, monitored, and confirmed is key to managing your assets effectively. Whether you’re tracking a transaction or trying to resolve delays, knowing the tools and techniques available will help ensure smoother transactions and better control over your Bitcoin investments.