Anyone who has ever bought anything from anyone can understand blockchain transactions. Just like there are senders, receivers, transaction amounts, and other essential things to understand the transaction in the real world, blockchain also carries similar information. The information is just abstracted from the users directly when you use a UI wallet like MetaMask. Let us remove the abstraction today and understand the actual contents of blockchain transactions in this beginner-friendly article.
Getting the blockchain data
Before we can see the contents of the transaction, we need to get the transaction data. Public blockchains are very transparent in this regard and therefore provide access to the complete blockchain data when we demand it. We can access this data in a few ways, including using Blockchain Explorer as a Service, which allows users to query and retrieve blockchain transaction details efficiently.
1. Running our own node – We can run our own node and download the full blockchain data on our hard drive to process locally. This is only required if you want to join the network or want to run an indexer.
2. Use an API – We can go semi-developer mode and use API endpoints by a service provider to do some pre-defined API calls.
3. Use a block explorer – This is the simplest way to see block data. And that’s the common man way of seeing what’s going on in any chain.
Components of blockchain data
Blocks and Transactions are the two areas of our interest here. Blockchain is made up of blocks, and blocks contain transactions. At any given time, you can look at the latest mined block. Usually, block explorers show this information on the homepage itself. Blocks are usually numbered. So, if you want to know the details of a specific block, you can search for the block number in the block explorer, and the respective block data will appear in front of you.
Opening blocks reveal the actual transactions, hash, parent hash, fees, block reward, fee recipient and more. The hash and parent hash can be used to detect fraud in blockchains. But our interest again, intends us to look at the individual transactions.
Transaction analysis:
Blockchain transactions are very simple. Typical blockchain transaction components include the following:
Transaction amount:
The amount of tokens getting transferred in that particular transaction.
Sender:
The address from which the transaction is being initiated or the amount getting deducted.
Receiver:
This is the address that receives the tokens. Again, it will look like the one shown above.
Transaction fees:
The cost of the transaction, this gets paid by the one who initiates the transaction or pays the transaction amount, also referred to as gas fees. Different networks use different tokens for this charge.
Timestamp: There is always a timestamp attached to each transaction and block, this tells you exactly when the transaction took place.
Status: Both transactions and blocks have a field called status. This tells us the current position of the transaction. Let us know if the transaction or block is still being processed, has been processed successfully, or failed.
However, not all transactions on blockchains are token transfers. There are smart contract initiation, execution, function calls and similar transactions also. These can also be easily viewed in modern block explorers.
There is usually a section in blockchain transactions called Method ID. This tells you what kind of transaction you’re looking at. This ID is the initial digits of the hash of the function signature. If a block explorer is able to categorize this ID, it will usually abstract it from you by giving you a human readable description of the transaction like, Transfer, Execution, Commit and Approve. But if not, it’ll just show you the ID.
Going further into such transactions can reveal additional information about them. Depending on the type of the transaction, you will be able to see token SWAPs, Transfers, ERC 20 and ERC721 token types, commits from rollups, contract function calls, and other types of details.
Smart contract transactions:
You can also see all the transactions associated with the smart contract by searching the smart contract address in the block explorer.
There is no such architectural difference between a contract address and wallet address, to be clear.
It will show you a detailed breakdown of all the function calls and transaction information happening in the smart contract. Seeing individual transactions from the contract will reveal the information similar to what we understood above.
Conclusion:
Blockchain systematically holds different types of transactions. Understanding these will help you figure out the exact workings of the system. The main components of blockchain transaction analysis are Blocks, Token transfers, and Smart contracts, wherein blocks hold all the transaction data. Transactions are easy to read, if you can analyze one, you can analyze almost all.
