Bitcoin is the pioneer of decentralized finance (DeFi) that enables you to have absolute control over value and make transfers across the world. As this crypto asset is known to offer decentralization and privacy, it eliminates the influence of third parties like banks or governments. But can Bitcoin be traced in the face of illicit acts?

We will be highlighting whether Bitcoin transactions can be traced in this article.

Overview Of Bitcoin Transactions And How It Works

Can Bitcoin be traced?

A Bitcoin transaction is a digital value exchange between two parties (receiver and sender).

This trade is through online exchanges, over-the-counter (OTC), or peer-to-peer (P2P) platforms.

The sender in the crypto transaction must first indicate how much BTC they want to send, and the recipient’s Bitcoin wallet address will be entered into the destination field.

In addition, you (the sender) can add a message to the transaction, which will be visible to the recipient.

You can proceed to send the Bitcoin once you enter your preferred amount.

This Bitcoin transaction will be broadcast to the whole network, where the miners will verify it. Upon verification, it will be added to the Bitcoin blockchain, and the recipient will receive the BTC.

It is noteworthy that Bitcoin confirmation of its transactions takes about 10 minutes.

This process of how Bitcoin works reiterates the efficiency and safety of this transaction, which you can complete without the meddlesome of a third party or central authority.

Can Bitcoin Be Traced?

Blockchain records Bitcoin transactions, and tools like Blockchain Explorer enable users to see Bitcoin transactions.

Although the blockchain does not reveal its users’ identities, relevant authorities like governments can track Bitcoin transactions using use some information available to the public.

This happens such that authorities can identify who is transacting with a certain amount of Bitcoin once there is a connection between the public address and any real-world entities like bank accounts.

Moreover, whitelisted Bitcoin wallets can trace Bitcoin. These are wallets that have a link to the verified account of a crypto exchange.

In this case, the exchange asks for personal information to verify the identities of Bitcoin wallet users while keeping the information for possible unusual transfers.

How To Trace Bitcoin On Blockchain

Here is a quick step to tracking Bitcoin transactions on the blockchain:

  • Visit a Blockchain Explorer website and enter the Bitcoin address you want to trace in the search bar.
  • Once you click enter, you will see the page that has the information on the address.
  • You can view transactions connected to the address and its recipient addresses.
  • You can see the block height for each transaction, including the time and date of every transaction. This will help to track the transaction and spending behavior.

Benefits Of Tracing Bitcoin Transactions

It is possible to trace Bitcoin flow and determine how people use the funds to keep its trail. This is because the Bitcoin blockchain is a public ledger that records every BTC transaction.

This is helpful in identifying money laundering activities, such that law enforcement agencies can use tracing Bitcoin to track criminals adopting the crypto asset to make illicit transactions.

Challenges Of Tracing Bitcoin Transactions

Blockchain is the simplest and basic method of tracing Bitcoin, but it will not expose the identities of the entities behind the transactions.

Therefore, it may not be easy to unravel the faces of people behind an illegal transaction.

Why Law Enforcement Agencies Want To Trace Bitcoin

There are some Bitcoin transactions that are illegal, becoming evidence of prosecution for enforcement agencies like the police.

Backtracking Bitcoin transactions enables relevant authorities to uncover every related activity and identify who makes or receives an illegal Bitcoin transaction.

This can lead to the arrest of everyone involved in the crime and not the only one caught in the act.

That is why authorities like the US Securities and Exchange Commission (SEC) demand crypto exchanges whitelist as many Bitcoin wallets as possible. This is to make tracing Bitcoin easier.

Frequently Asked Questions (FAQs)

Can I Trace Bitcoin?

Yes, you can trace Bitcoin using Bitcoin Explorers or whitelisting Bitcoin wallets. This enables the mapping and tracking of activity on the blockchain.

What Makes Bitcoin Traceable?

The transparency of the blockchain makes Bitcoin transactions traceable. This is because you can easily find every transaction on the publicly distributed ledger.

Can I Search For A Bitcoin Wallet Address?

You can search for a Bitcoin wallet address through a Bitcoin Explorer. However, you must know that finding a crypto address does not necessitate the identity behind it.


Bitcoin is a popular and expensive crypto asset that continues to attract traders to the market. However, it is important to know the possibility of tracing Bitcoin during trading. This involves buying and selling (sending and receiving) BTC.