What are blockchain explorers, and five basic ways to use them
article by CryptoJelleNL
Most retail crypto traders rely on technical analysis to inform their trading decisions, but a growing group of people almost wholly disregards the charts and focuses on fundamentals instead.
We continue our series on fundamentals today, covering the basics of Blockchain explorers, and different ways you can use them in your trading.
You may also want to read our previous article, where we discuss crypto whitepapers.
Blockchain explorers are a key part of the blockchain and cryptocurrency infrastructure, playing an important role in the transparency of a chain. Let’s dive into what a blockchain explorer is, and how it works!
What is a Blockchain Explorer?
Blockchain Explorers are a popular tool in cryptocurrency analysis that allows you to access both live and historical information about transactions, wallets, and blocks on a specific blockchain.
Essentially, blockchain explorers serve as a GUI (Graphical User Interface) for the blockchain, displaying all information on the chain in a more accessible way. The blockchain explorer allows you to search for all kinds of information on the chain and displays the information in an easy-to-understand way.
For example, traders may use a blockchain explorer to monitor the transactions and balance of a specific wallet address (for example, the transactions of a popular trader), or monitor the usage and health of a specific dApp.
Blockchain explorers are used by both beginner and experienced traders in a myriad of ways, which we’ll get to later.
There are many different blockchain explorers out there, but some of the most popular ones are Etherscan (for Ethereum), BscScan (for BNB Chain), SolScan (for Solana), TRONScan (for Tron), and Blockchain (Multi-Chain).
How does a blockchain explorer work?
Blockchain explorers display the information on the blockchain in a more accessible format. They access and extract the data from the blockchain, and feed it into the explorer's database - which in turn can be accessed by its users. The database is what allows users to search by wallet address, transaction ID, or contract address.
How to use a blockchain explorer?
Most blockchain explorers work very similarly, so once you get the hang of one, using other explorers is generally very intuitive. The below paragraphs are an overview of different ways you can use a blockchain explorer to your advantage. This may work slightly differently per explorer, but generally speaking, it works about the same.
Access basic blockchain information
The homepage of most blockchain explorers displays basic information about the chain it covers. For example, the Etherscan homepage displays Ether’s current price and the according market capitalization, the total transactions on the chain, and the last finalized block.
This overview (and especially the graph of the transaction history) is a great insight into the activity on a chain, which can help you spot shifts in chain popularity - if you monitor multiple blockchains.
Check the Gas Price
The homepage shows another key indicator, the current Gas price on the chain. The price of Gas can fluctuate significantly during busy periods, so double-checking the cost of gas before moving funds around can save you some precious eth.
More detailed information can be found by clicking the Gwei amount in the top-left corner, which makes the below overview pop up:
In this screen, you can access the current cost of different transactions, such as OpenSea Sales, or swaps on Uniswap V3.
Searching Address Balance and Activity
One of the most popular ways to use blockchain explorers is to check the balance and activity of a specific address. Simply paste a wallet address (I used ben.eth’s wallet as an example) into the blockchain explorer, click the address that pops up, or hit enter.
The explorer then displays an overview of the balance of the account (marked in red), as well as its recent transactions (marked in blue).
The buttons above the transaction overview can be used to go into more detail, such as checking ERC-20 transfers, NFT transfers, and Internal transactions. Inside the overview, the token holdings dropdown menu allows you to access all ETH-based tokens held by the wallet address.
Accessing this transaction history can be useful in different ways. For example, you may access your own wallet’s history to file your tax return, or follow another wallet to see what trades someone is taking.
View a Block’s content
In addition to monitoring transactions and wallet balances, blockchain explorers allow you to analyze block parameters. The height, size, gas limit, and difficulty of a block can all be accessed using a blockchain explorer.
Most explorers also allow you to access the contents of a block, such as the transactions it processed and the average gas fee of these transactions.
Simply paste a block number into the blockchain explorer, and hit enter.
The explorer then displays an overview of the available information, such as the Timestamp, the transactions, the block reward, difficulty, and gas used. The items in blue are clickable, and allow you to go into further detail.
Access a Token’s Details
Blockchain explorers allow you to look into the details of a specific token as well. This can help you research a token before deciding to invest in it (or not) or to sniff out fake tokens.
Simply copy the tokens’ contract address (from a reputable source, such as CoinMarketCap or CoinGecko), paste it into the blockchain explorer, and hit enter.
The explorer then displays an overview of the available information, such as the contract creator and the latest transactions for the token.
Closing Thoughts
All in all, blockchain explorers are a crucial part of blockchain and crypto infrastructure, and there are many ways of using them. This article covers the basics, but once you get into it, there is much more to explore!
We recommend experimenting with different explorers, and reading more material on how they work - to learn everything there is to know, and hope this article helps you get started.
Good luck and happy exploring!
Author's Disclaimer: This article is based on my limited knowledge and experience. It has been written for informational purposes only. It should not be construed as investment advice in any shape or form.
Editor's note: CryptoJelleNL provides insights into the cryptocurrency industry. He has been actively participating in financial markets for over 5 years, primarily focusing on long-term investments in both the stock market and crypto. While he watches the returns of those investments roll in, he writes articles for multiple platforms. From now on, he will be contributing his insights for Alpha Circle as well.
Check out his twitter: twitter.com/cryptojellenl
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