Blockchain explorers are becoming more common, with Blockstream recently updating its own block explorer blockstream.info, BullBitcoin announcing work on a new public platform and MyEtherWallet putting forward an alpha of their EthVM. Google’s own moves into search functionality for blockchain ledgers is also a significant development.
These tools allow users to see blockchain transactions and related data which of course covers cryptocurrency movements too. On the face of it, this might seem like a beneficial development that can only help transparency and build confidence in crypto in the never-ending quest for wider public adoption, but for some observers, it is a worrying move that threatens privacy and raises questions about centralization and control.
Olga Kupchevskaya, the Vice President of popular Ethereum wallet MEW, commented: “A block explorer, like EthVM, can clarify a number of issues for daily users. For instance, the status of their transaction can help users figure out the reason why it’s taking longer than expected to process – or not arriving at all. Seeing how much gas was used will help them determine the best gas setting for future transactions.”
“Even checking the address balance is very useful – various dapps [decentralized applications], wallets and exchanges can occasionally have issues that will prevent users from seeing their account balances, but the blockchain explorer can confirm that it’s just a programming error and the funds are still there”, Kupchevskaya added.
MEW’s explorer is open source and according to the company “welcomes community collaboration”, which it hopes will enable additional features to be added. Kupchevskaya explained that anything that helps give a better understanding of the workings of blocks and transactions can help the user experience.
Block explorer literacy is something that will grow as the tools themselves become more widespread and it is something of a necessity, as having little or no knowledge of the way an explorer works and what it is actually offering can actively backfire. In fact, the dangers inherent in the platforms are why some companies have made the decision to build their own. A privacy focused Bitcoin wallet called Samurai Wallet has developed its own explorer OXT with innovative features such as a 3D visualization of the Bitcoin blockchain which it calls Landscapes.
Francis Pouliot, CEO and co-founder of the Canadian Bitcoin exchange BullBitcoin, has issued his own warnings about block explorers, saying that ideally, they should never be something utilized by an end user. “Block explorers are usually only required when a user would need to visually have access to numerous addresses and transactions, for example when doing blockchain investigations”, Pouliot said.
“Users should be aware that when looking up a block explorer, they are using the Bitcoin Network or querying the Bitcoin Blockchain. They are asking a 3rd party to give them information about the Bitcoin Blockchain. As such, block explorers can lie to users, which cannot independently verify whether the block explorer is telling the truth or not unless they are running their own full node”, warned Pouliot.
In Pouliot’s view, a block explorer is simply a Bitcoin full node in which the database is indexed, thereby allowing searches of data on the blockchain which can be undertaken in a fast and efficient manner.
Public blockchain explorers are full of data, which means that the way it is displayed is key to their being able to be used effectively. Another factor that cryptocurrencies relying on blockchain tech have is their own block explorers and these can’t be used for rival coins. For example, Bitcoin’s block explorer cannot view Litecoin transactions and vice versa.
However, amongst the things that can be achieved using an explorer are viewing a live feed of all the blocks that are being added to that particular blockchain in real time and viewing the details of any transaction that the user would like. This would offer up details of the amount sent, the address from which it came, and the destination address too. With this kind of information publicly available, it isn’t hard to see why many are voicing concerns about the impact on privacy.
Bitcoin transactions are essentially public and are only pseudonymous and this realization is something that every user needs to come to terms with. The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has already identified individuals by their Bitcoin addresses to take actions against malicious cyber dealings, but with the growth of blockchain explorers into the public domain, the shoe could soon be on the other foot and hackers could find vulnerabilities to exploit which previously have gone unnoticed.
Tracking illegal activity using block explorers is something that Kyrylo Chykhradze, head of Bitfury Crystal, has been actively involved with and believes that tracing funds on the blockchain that have been obtained illegally is possible.
“Using a unique clustering algorithm, Crystal can determine which bitcoin address belongs to certain users. The solution also utilizes web crawlers and manual registration on various services to name the entities and assign them a risk score based on the type of service. Crystal, which has assisted financial institutions and law enforcement in identifying and tracing criminal activities such as extortion and money-laundering, assigns a risk score based on every bitcoin address that has ever appeared in the blockchain”, he said.
With transparency and public access to blockchain ledgers lying at the heart of the concept of the original cryptocurrency Bitcoin and many of its follow-ons, it is something of a strange debate as to whether wider access to tools that allow viewing of transactional data can be a good or bad thing. In terms of benefits and risks anyone involved in the world of crypto is used to dealing with both on a daily basis, so it will be interesting to keep track of where the current state of blockchain explorers moves towards in the near future.