Main conclusions

  • A transaction ID (TXID) is an alphanumeric string that serves as a unique identifier for transactions on the blockchain.

  • TXIDs are traceable across blockchain networks.

  • Hash functions are mathematical algorithms that produce a final fixed-length alphanumeric TXID.

What is a Transaction ID and how does it work?

Blockchain has many advantages, including the possibility of faster, cheaper and more transparent transactions. Whether you send or receive digital coins, all transfers can be easily traced in a decentralized database.

A transaction ID (TXID) is a unique string of letters and numbers that every verified transaction on the blockchain has. With TXID, you can find out information such as the amount sent, the date of the transfer, the sending and receiving addresses, and the number of network confirmations of asset transfers in a distributed database. 

When a transaction is initiated, it is validated by network participants, often called miners or validators. After that, it is assigned a unique TXID created using cryptographic hashing algorithms, such as SHA-256 or RIPEMD-160.

SHA-256 is a cryptographic hash function used to generate a unique fixed-size hash value from input data. In blockchain transactions, SHA-256 is applied to the transaction data to generate the TXID.

RIPEMD-160 is a cryptographic hash function used primarily in cryptocurrency applications. It generates a 160-bit hash value, which is often used to create shorter representations of public keys in cryptocurrencies, which serves as the basis for generating addresses and guarantees a higher level of security.

Examples of transaction IDs

Although a transaction ID may look like a long string of random characters, each letter and number contributes to its uniqueness. Let's consider some interesting examples of TXID.

  • The first Bitcoin transaction from Satoshi Nakamoto to Hal Finney in 2010:

f4184fc596403b9d638783cf57adfe4c75c605f6356fbc91338530e9831e9e16

  • Buying a pizza for 10,000 BTC. This is the first time Bitcoin has been used to purchase a physical product. On May 22, 2010, BTC miner László Haniec purchased a pizza for 10,000 virtual coins, which at the time equaled approximately $41. 

a1075db55d416d3ca199f55b6084e2115b9345e16c5cf302fc80e9d5fbf5d48d

  • Largest Bitcoin transaction of 500,000 BTC. It was carried out on November 16, 2011.

044e32f5e01d70333fb84b744cb936bf49acab518282c111894b18bcf3a63c12

The importance of the transaction ID

TXIDs play a fundamental role in the transparency and accountability of blockchain transactions. They provide users with the means to track the status and details of transactions, including sender, receiver, time and amount. In addition, transaction IDs facilitate the process of confirming the transfer on the blockchain.

TXIDs guarantee the authenticity and validity of transactions. Each transaction ID is unique and generated based on specific data such as inputs, outputs and timestamps. This cryptographic authenticity ensures that the TXID cannot be forged or altered, providing a reliable method of verifying the integrity of transactions. Network members can verify the legitimacy of a transaction by cross-referencing its ID.

In addition, TXIDs facilitate the auditing, analysis and forensics of blockchain data. Developers use transaction IDs to analyze patterns, trace asset flows, and detect anomalies or suspicious activity in the distributed ledger. By examining TXIDs and related details, analysts can gain insight into the behavior of network participants, identify potential fraud or double-spending attempts, and enforce regulatory compliance.

Transaction IDs serve as essential tools in chargeback management, offering merchants and payment companies a reliable means of tracking, verifying, and resolving disputed transactions. When a customer initiates a chargeback, claiming the transaction was unauthorized, fraudulent, or incomplete, TXID allows merchants to quickly locate and review the details of the transaction in question. That is, the trader can verify the legality of the transaction and gather relevant information to support his position during the chargeback appeal process.

By cross-referencing the transaction details associated with the TXID, including the amount, date, time, and customer details, merchants determine whether the chargeback is valid, a misunderstanding, or an error. This helps provide evidence to refute invalid chargeback claims.

Transaction IDs also play a key role in communication and documentation throughout the chargeback management process. When sellers respond to chargebacks or disputes, they are often required to provide documentation and evidence to support their position.

Transaction IDs can be used to verify the integrity of a particular transaction. Transaction data is linked to a hash value via the blockchain's TXID. Therefore, any change to the transaction data will change the value of the hash function. As a result, the importance of transaction IDs is that they play a fundamental role in cryptocurrency-related operations, such as tracking, verifying, troubleshooting, and ensuring data integrity.

Where to find and how to check the transaction ID?

When you transfer cryptocurrency from a centralized exchange, the platform will display your TXID in the transaction history section of the account. However, if the withdrawal is from a wallet, you need to use a blockchain explorer to find your transaction ID using these four steps.

  1. Open a blockchain explorer such as blockchain.com or etherscan.io.

  2. Connect your wallet to the conductor.

  3. Go to the completed transactions section where you will see all TXIDs displayed.

  4. Click on the transaction ID to see its details.

Therefore, cryptocurrencies work on the basis of decentralization, and thanks to this, users can easily check the status and authenticity of their transactions.

Binance Transaction ID

To find a TXID on Binance, follow these instructions:

  1. Log in to your Binance account.

  2. Hover over Wallet and click “Transaction History”.

  3. Here you can view details such as time, transfer, deposit wallet, coin, recipient amount, status, and transaction ID.

Hence, Transaction ID or TXID is an indispensable element in the world of cryptocurrencies. They act as a digital fingerprint for each transaction, ensuring that each one is unique, traceable and verifiable.