What is blockchain?
Blockchain is a decentralized and distributed ledger that records all transactions on a network of computers. Each block in a blockchain contains a list of transactions, and once a block is added to the chain, it cannot be altered or deleted. This makes it an ideal system for secure and transparent record-keeping.
How does blockchain trace crypto transactions?
Every transaction made with cryptocurrency is recorded on the blockchain. When you make a transaction, your public key (the address associated with your cryptocurrency wallet) is used to initiate the transaction. The public key is then verified by the network, and the transaction is recorded in a block on the blockchain.
Once a block is added to the chain, it cannot be altered or deleted, which means that all transactions made during that time are permanently recorded in the blockchain. This makes it possible for anyone to trace the source of a transaction by looking at the blockchain records.
However, there are some limitations to tracing crypto transactions. For example, if someone uses a private key (which is associated with their cryptocurrency wallet) to make a transaction, it is not possible to identify the source of that transaction. Additionally, if someone sends cryptocurrency through multiple transactions or mixes it with other funds, it can become more difficult to trace the original source of the funds.
In conclusion, while it is not entirely impossible to trace crypto transactions, it does require some effort and knowledge about blockchain technology. It is important for users to be aware of the potential limitations of anonymity in the digital world, and take steps to protect their privacy when using cryptocurrency.
