I'm studyng the transactions and how they work. Suppose I would track some bitcoins that I spent. This is a scenario: My pubblic addresses are: addr1 and addr2. I made a transaction tr1 (output like blockchain.info):

input addr1 2BTC        output  addrX 1.5BTC
                                addr2 0.4BTC
                                addrY 0.1BTC

Now I would know where will be spent the 1.5BTC that I sent to addrX. Suppose I use the blockchain.info explorer and the addrX makes another transaction tr2. What I do is:

1 - search for the addrX,
2 - find the tr2 where my input of 1.5BTC is spent
3 - reapet the first step but with the addresses specified in output of the previous transaction

Am I correct? In this way can I "follow" the bitcoin that I spent? Many thanks.


Yes, that is basically what you need to do.

You will find, however, that it gets much more complicated after a few transactions. For instance, what if tr2 from your example includes another input of 8.5BTC, and 4 outputs of 2.5BTC each. Where did your 1.5 BTC go? Since your 1.5BTC only made up 15% of the value in tr2, does that mean all 4 outputs are comprised of 15% your funds? What if the 4 outputs weren't all equal in value?

These questions highlight the concept of "taint analysis" when tracking coins. By it's nature, the Bitcoin network mixes together inputs to forge new outputs, thus there is never a true path that a coin takes from owner to owner. In many ways, it is better to think of a transaction as an operation that destroys all the coins in its inputs, and (optionally) creates new coins with its outputs.

  • Thanks a lot for the answer. Out of curiosity, but I'v read so thread about forensics bitcoin, or bitcoin intelligence. Approximately, how these tools work? (if this question is out of scope, feel free to not answer). – d3llafr33 Oct 19 '16 at 21:47
  • When it comes to Bitcoin privacy, you also have to consider that addresses can be associated with one another. If you see two addresses on the network that are being used as inputs to a transaction, you have a good reason to believe they are owned by the same person. If someone re-uses addresses, you can start to link multiple addresses by association as transaction inputs. Also, if you can identify which output is a change address, you can link even more. I'm no expert, but there's quite a bit you can extrapolate from the blockchain. – Jestin Oct 19 '16 at 21:50

Yes, you are correct. This is the way to follow. To easily follow you can use tools like blockseer

  • Many thanks. I'm looking at the link. It's seem interesing. – d3llafr33 Oct 19 '16 at 21:47

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