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My first contact with blockchain and Bitcoin was in late 2019, so pretty late, considering the opportunities it was already creating. I wish I had discovered it back in 2016, like many people interested in IT, finance, and digital technologies. Sometimes I dream I had heard about it even earlier, as far back as 2010.
Unfortunately, in 2016, I fell in love with AI after coming across IBM’s AI for Dummies. It completely consumed my attention, and somehow, I missed the existence of blockchain and Bitcoin.
As I like to say, not knowing is often a big mistake and can be very painful. I was never so close to a real possibility of acquiring a large fortune in my entire 61-year life. Nevertheless, better late than never.
Soon after that discovery (from a Mel Gibson YouTube clip), I began my own research and intensive learning, which led me to become crypto‑native. I also enrolled at RMIT to learn more about blockchain and AI strategy.
In simplest words, blockchain forensics is about scientific analysis of on-chain transaction data used to uncover crypto-related, not always legal activities. Even though blockchains are pseudonymous by design, they are not fully anonymous. That opens the door for some serious investigative work.
This field leans heavily on transaction graph analysis, which helps visualise financial relationships between wallets and spot suspicious activity. Patterns usually do not lie, especially on a public ledger.
Address clustering is another key technique. It links multiple addresses likely controlled by the same entity by analysing transaction behaviour, shared inputs, and spending patterns.
Then there is wallet analysis. I mean digging into wallet files, private keys, and associated data to support investigations. Combined with forensic imaging tools (used to preserve the integrity of device data), it ensures that digital evidence is handled securely and accurately.
All these methods help law enforcement and security teams trace illicit activity. It ranges from money laundering and ransomware payments to stolen assets. The main goal is to deliver more transparency and stronger safeguards across crypto networks, without compromising the core principles of decentralisation.
There may be a dedicated purpose for the tax, I suppose, but it’s a topic that deserves a separate article.
Now I am going to clear something up really quickly – blockchains are not anonymous. They are pseudonymous at best, and wide open at worst.
Many people think using crypto is like wearing a veil of invisibility, but reality is much different. It is like walking naked through a glass house that logs your every step forever. I mean, where blockchain forensics comes in. We are talking the art (and science) of tracing, tracking, and unpacking on-chain activity. And it is way more important than most people realise.
No matter if you are a casual crypto enthusiast or a professional investor and trader, understanding the basics of blockchain forensics or chain analysis is not optional anymore. It is paramount, because it may affect your life!
My background is in Pathology and Laboratory Medicine. So, using analytical thinking and familiar with forensics-like methods was my bread and butter. To trace, see, and measure difficult to notice “stuff” (whatever it is), you need tools, procedures and follow the methods. From time to time, improvise as well.
If you can get it this way, you may succeed the other way.
As you can guess, there are some similarities between the clinical lab, the forensic lab and the blockchain lab. You need to understand the techniques and the entire ecosystem.
BTW,
Have you ever been lost for hours exploring Etherscan of different block explorers? If your answer is not, are you even considering yourself properly crypto native?
A blockchain explorer is a tool that allows users to search, view, and analyse detailed data recorded on blockchain networks. It acts like a search engine for blockchains, providing transparency and insights by displaying real-time and historical data about transactions, wallet addresses, blocks, and smart contracts.
As there is no single blockchain, there are multiple blockchain explorers. Each specific explorer traces transactions on a particular type of blockchain.
Think about a blockchain explorer like about Google, Opera, or Comet for blockchain transactions. Plug in a wallet with an address, transaction hash, or token contract, and you have got all you need.
You are looking at the full on-chain activity: amounts, timestamps, gas used, sender, receiver, even contract interactions if you want to get a bit spicy.
And here is the essence, it is all publicly provided that you know where and how to look for it.
Do not be surprised! Better be aware that you may be followed.
Users can enter transaction IDs, wallet addresses, block numbers, or smart contract addresses into the explorer’s search bar to access detailed information.
Key functionalities may include:
Transaction verification: View transaction details such as sender/receiver addresses, amounts, fees, timestamps, and mempool status.
Address analysis: Check wallet balances, transaction histories, and token holdings.
Block exploration: Examine block height, miner info, transactions included, timestamps, and network statistics.
Smart contract interaction: Review contract source code and interact with contract functions on platforms like Ethereum.
Analytics: Monitor network hash rates, transaction volumes, mempool size, and other blockchain metrics.
To have some fun and not to be deadly serious with technicality, it is worth noticing that you and I (and everyone else) can investigate and explore someone’s wallet, for example (MetaMask, or other types of wallets), any day and anytime.
Just provide me with your transaction hash or wallet address, and I will watch you and your transaction movements.
Random “snooping” can be interesting as well, especially if you are curious or bored. It is also a good way to practice and learn.
You may start from snooping on yourself, I guess. You have got all the data you need, so you will see if what you discovered is correct or incorrect.
Then you can try on a random “hunt” for others.
Important:
Only by experimenting, learning, and consistent practice, one day you may become a master. Never stop trying and learning.
Once again, blockchain explorers show detailed data on:
Individual transactions: IDs, amounts, sender/recipient addresses, fees, and timestamps.
Wallets: Balance and entire transaction history, including token holdings.
Blocks: Block height, miner identity, time mined, number of transactions, difficulty, and size.
Network status: Hash rate, transaction volume over time, mempool size, and price feeds on some explorers.
Smart contracts: Code, interactions, and deployment details.
So, as I said, anyone, anywhere, can look up what is going on public blockchains. That means you can verify that an NFT sale really happened, track funds from a sketchy wallet, or see how active a DAO treasury actually is.
But it also means your trades, your transfers, and even your dumb test transactions are all part of the permanent record.
Explorers like Etherscan or others are not just tools for developers, tax men, or law enforcement.
They are essential for anyone living on-chain. Learning how to read them is like learning how to read a map in a new city, or boat charts when you are going deep fishing. It helps you move smarter, avoid scams, and know what is really going on blockchain.
Blockchain.com – Bitcoin (BTC)
Etherscan – Ethereum (ETH)
BscScan – BNB Chain (BNB)
Solscan – Solana (Sol)
SnowTrace / Avalanche Explorer – Avalanche (AVAX)
TokenView – Multi-chain support
Polygonscan – Polygon network (POL – ex Matic)
FTMScan – Fantom network (FTM)
Now, let’s talk about why all this forensic stuff is even possible.
Public blockchains are immutable.
It means once something is recorded, it is locked in forever.
You cannot go back and change a transaction.
You cannot erase your on-chain history.
This is part of what makes blockchain technology so powerful and handy. We do not need to “trust” someone else that it is accurate. We can verify it ourselves.
It is a so-called mechanical trust on blockchain. I was writing about it in my RMIT assignment when studying cryptoeconomy, cryptofinance, and blockchain. Feel free to read.
Most major chains like Ethereum, Bitcoin, and Solana are public. Anyone can view every transaction from the Genesis block to now. This is the dream of open finance, but it is also a double-edged sword. While transparency builds trust and auditability, it also exposes everything.
People often forget that transparency does not equal privacy.
Even if your wallet is just a string of characters, once it gets tied to your real-world identity, it is game over. Every transaction you have ever made is out in the open.
Now we will get it a little bit more spicy: I think about Tornado Cash, some call it Whirlpool, some may call it Cryptocurrency tumblers.
This protocol is what we call a mixer. It lets users deposit ETH into a smart contract and withdraw it to a different address, breaking the link between sender and receiver. Think of it like shaking a bag of coins and pulling out a random one. Simple concept, huge and practical implications.
On one hand, Tornado Cash helps people maintain privacy in an ecosystem where everything’s visible. Maybe you do not want your payroll address linked to your main wallet. It looks fair enough. For me, it looks.
But what is good… bad actors love it too. And in 2022, the U.S. government sanctioned Tornado Cash, citing its use in money laundering.
I’m sharing this information for educational purposes. It’s widely available online if you search for it using an answer engine like Perplexity or Comet.
It sparked multiple times a massive debate: is financial privacy a right, or a red flag?
It is complicated, indeed. What is not complicated is this: forensic tools are constantly evolving to keep up. Newer analysis methods try to untangle even obfuscated flows from mixers and bridges. I am not surprised. How about you?
It is a cat-and-mouse game between privacy and accountability.
Here is the clear message: you do not need to be Chainalysis to benefit from blockchain forensics.
For example, you are checking out a new project. Wouldn’t you want to see if the developer’s wallet has been dumping tokens on the market?
Or maybe you spot a whale accumulating your favourite token, and you might want to ride that wave. Copy his behaviour.
But be always careful, even the biggest whales can make mistakes.
Remember, safety first! That applies also to blockchain.
Blockchain forensics shows us that everything on-chain leaves a trail. Just a breadcrumb as a professional says. To be honest, nothing new as internet activities are considered.
But while that is great for accountability and trust, it also means we need to be aware of what we are constantly broadcasting. I mean intentionally, or not.
Whether you are just aping into NFTs or managing millions in DeFi, understanding how transparency works is no longer optional.
It is a significant part of being sovereign in the digital age.
Because in Web3, the blockchain does not forget. So maybe it is the highest time we start pay proper attention and remembering what that really means.
Originally published on:
Discover the essentials of blockchain forensics-how transparency in crypto is both a safeguard and a vulnerability. Learn how explorers, tracing tools, and pseudonymity shape the new rules of trust and investigation in Web3.
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