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One can effectively navigate and utilize a blockchain explorer. Learn how to explore transaction details, check wallet balances, verify blockchain data, and track the progress of transactions. Gain insights into the features and functionalities of blockchain explorers to enhance your understanding of blockchain technology and cryptocurrency transactions.

If you're into cryptocurrencies, you've probably wondered at some point how to view and explore different recorded transactions on the blockchain. A simple way to do this is to use a blockchain explorer. 

Much like how search engines index the internet, blockchain explorers index blockchain transactions, enabling users to gain insight into their transactions.

In this article, we take you through this tool in detail and share how you can use it to track different transactions, leveraging it for tax purposes.

What is a Blockchain Explorer?

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A blockchain explorer, also known as a blockchain browser, is a tool that allows users to visualize and inspect blocks in a blockchain network. 

You can access real-time information such as recent blocks, transaction histories, the origins and destinations of funds, the state of individual addresses, and other data. 

How do Blockchain Explorers work?

The blockchain explorer retrieves data from a blockchain using a node, extracting relevant data from the latest blocks and transactions, and presenting it in a searchable format. Each blockchain explorer typically focuses on a particular blockchain, for instance, Etherscan for Ethereum or Blockstream for Bitcoin. 

The explorer sends queries to these nodes, requesting specific details about transactions or blocks. This data is then compiled and formatted into a user-friendly interface, which may include searchable tables, charts, volume analysis, and other useful features.

How Can You Use a Blockchain Explorer?

You can use a blockchain explorer to access the following information:

• Transaction Verification: Blockchain explorers can confirm whether a transaction has taken place by showing the number of confirmations it has received.

• Transaction Histories: You can inspect the transaction history of a specific public address, tracking how many transactions it has sent and received, and the corresponding balance.

• Block Information: Blockchain explorers reveal the details of individual blocks, such as their size, timestamp, and the transactions it includes.

Using a blockchain explorer is relatively straightforward. Most of them have a search bar where you can input a transaction ID, block number, or public address to search. 

Here's a step-by-step breakdown:

• Go to the blockchain explorer website you want to use.

• Insert the transaction ID or public address into the search bar.

• You'll see a range of information, including the transaction status, the number of confirmations, the transaction fee, the date and time, and the involved addresses.

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For example, you can track transactions on Etherscan by entering your wallet address, for instance, Coinbase. By searching with your Coinbase address, you will find transaction histories of your Coinbase wallet. 

Alternatively, you can search using the specific transaction hash generated by Coinbase upon confirming the transfer. Copy and paste the transaction hash into Etherscan to track the progress of the transfer. 

Blockchain Explorer and Taxes: How Can Kryptos Help?

When it comes to tax compliance, blockchain explorers can be incredibly handy. They allow you to monitor your crypto transactions, which is important for accurate tax reporting. By inputting your public addresses into the explorer, you can review all incoming and outgoing transactions. This allows you to calculate your capital gains or losses accurately and understand your tax liability.

Remember that blockchain explorers provide raw data and not tax advice. Manually tracking these transactions can also be time-consuming. You can use specialized tax software like Kryptos or consult a professional to ensure you're complying with your local tax regulations.

Kryptos simplifies the process of tracking all your transactions by pulling in data from any wallet you add to the platform and categorizing them automatically. 

The platform supports 100+ wallets and exchanges, 2000+ DeFi protocols, and NFTs. So, you can simply add your assets and track your entire portfolio through a single dashboard. Additionally, you can use the app to manage your tax liability according to local regulations and utilize inbuilt tax-saving strategies.

Want to see how can Kryptos help manage your crypto assets? Sign Up Now.

FAQs

1. What is a Blockchain Explorer?

A Blockchain Explorer, also known as a Blockchain Browser, is an online tool that provides visual and searchable access to a blockchain's transaction history, network statistics, and other operational details using a transaction ID or public wallet address.

2. How does a Blockchain Explorer work?

The Blockchain Explorer works by communicating with the decentralized network of nodes that make up a blockchain. It queries these nodes to retrieve specific information about transactions, blocks, or addresses.

3. What information can I find in a Blockchain Explorer?

A Blockchain Explorer provides different information including transaction verification, transaction histories of specific public addresses, details about individual blocks (like size, timestamp, and included transactions), and current network status. You can also see details about specific transactions, like the sender's and receiver's addresses, the transaction fee, and the transaction date and time.

4. Can a Blockchain Explorer help with taxes?

It can aid with tax preparations by allowing users to monitor and record their cryptocurrency transactions. By entering public addresses into the explorer, users can review all incoming and outgoing transactions which is crucial for accurately calculating capital gains or losses. However, it's recommended to use specialized tax software or consult a tax professional to ensure tax compliance.

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All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position / stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!