Transaction Hash in Blockchain: What It Is and How It Works

A transaction hash is a unique code used to track operations on the blockchain. It is a string of characters generated by cryptographic algorithms. This hash acts like a passport for each transaction, protecting it from changes and counterfeits. Thanks to it, we can be sure of the transparency and security of the entire network.

Each transaction receives its unique hash, which serves as a label for searching and verifying. This code is meaningless in a logical sense, but it links the transaction to a block. For cryptocurrency users, the transaction hash is a primary tool for ensuring their funds are in order. The transaction hash is used across all popular blockchains: Bitcoin, Ethereum, and Binance Smart Chain.

In this article, we will explore what a transaction hash is, how to create one, and what it is used for, as well as answer all the main questions on this topic.

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What is a Transaction Hash

A transaction hash is a unique string of characters created using a cryptographic hash function that “swallows” the data of the transaction and returns a unique identifier. It is akin to creating a fingerprint for each transaction. Every time someone sends cryptocurrency or performs any operation on the blockchain, a hash is created that is strictly tied to the transaction’s contents: who sent it, who received it, how much money was transferred, and what fees were charged.

Why is a Hash Not Just Random Characters?

The hash is the result of cryptographic algorithms, such as SHA-256 for Bitcoin or Keccak-256 for Ethereum. These algorithms work like magic: the transaction data is transformed into a fixed-length string, and this string is absolutely unique. If someone tries to change even a single character in the transaction — for example, the amount or address — the hash will change instantly. This makes any attempts to manipulate transactions on the network obvious to all.

Security and Immutability

In 2025, the importance of hashes continues to grow. Through hashing, the blockchain can ensure that no one can alter the transaction history without it being noticed by other participants in the network. This is the basis of blockchain security and why this technology is so popular across various fields — from cryptocurrencies to data storage and decentralized applications.

So, a transaction hash is not just a technical detail. It is the heart of blockchain security, which continues to amaze with its strength and immutability in a world where information is the most valuable asset.

Why Are Transaction Hashes Needed

A transaction hash performs several key functions that make the blockchain secure and user-friendly. Here are some of them:

• Identification of Transactions. A hash helps to precisely identify a transaction on the blockchain. Every hash is unique, allowing users to easily find a specific operation using only its hash. 
• Ensuring Security. The transaction hash protects it from changes and counterfeits. If someone attempts to alter the transaction data, its hash will change, and this will be visible to all network participants. This makes it impossible to change information without being noticed. 
• Tracking Transaction Status. Users can utilize the transaction hash to track its status. For instance, if you send Bitcoins, you can enter the transaction hash in a blockchain explorer and see whether the transaction has been confirmed, how long it took to process, and what fees were charged. 

Additionally, the transaction hash plays a vital role in ensuring the transparency of blockchain operations. Since all transactions on the blockchain are public, the hash allows anyone to check the transaction history and verify its authenticity.

How Are Transaction Hashes Created

The process of creating a transaction hash consists of several stages. Let’s see how it happens:

1. Gathering Transaction Data. At this stage, all necessary data about the transaction is collected. This includes information about who the sender and recipient are, how much money is being transferred, what fee will be charged, as well as additional information such as the timestamp. 
2. Applying Hash Function. Once all transaction data is collected, it is fed into a cryptographic hash function, such as SHA-256. This function processes the input data and generates a unique string of fixed length. 
3. Adding Hash to the Blockchain. The transaction hash is added to a block, which is then recorded on the blockchain. The blockchain is a chain of blocks, and each block is linked to the previous one via a hash. This creates a secure and immutable record of all transactions on the network. 

After the transaction is recorded on the blockchain, its hash becomes available to all users. This allows them to easily track its status and verify its authenticity.

What is TXID?

TXID (Transaction ID) is an alternative name for the transaction hash. This term is often used in the crypto community and identifies the same identifier as the transaction hash. Unlike the hash, which may be a more technical term, TXID is more commonly used in everyday discussions among cryptocurrency users.

Example of a Transaction Hash

An example of a transaction hash may look like this: 0xabc123…. This is a fixed-length string of characters that is unique to each transaction. It does not contain information about the transaction itself, but allows precise tracking of it on the blockchain.

To verify the transaction, you need to enter this hash in the search bar on a blockchain explorer website, such as Etherscan or Blockchain.com. After that, you will be able to see the transaction status, amount, fee, and other data.

Transaction Hash and Blockchain Security

A transaction hash plays a critical role in ensuring blockchain security. The blockchain system relies on hashing to protect data from alteration and counterfeiting. When transaction data is recorded on the blockchain, the hash of this transaction is generated in such a way that any change in the data will lead to a change in the hash. This allows users and miners to quickly detect any attempts to manipulate data.

Blocks in the blockchain are interlinked using hashes. Every new block contains the hash of the previous block. This makes the blockchain very secure. If someone tries to alter the data in one block, the hash of that block will change, and the chain of blocks will be broken. Thus, the blockchain provides a high level of security and transparency.

How to Check a Transaction Hash

Checking a transaction hash is an important and straightforward procedure that allows you to find out the status of an operation on the blockchain. In 2025, thanks to blockchain explorers, this process has become even more accessible and comprehensible. Here’s how to do it:

1. Go to a blockchain explorer website
   First, select an appropriate blockchain explorer. For instance, for the Ethereum network, use Etherscan; for Bitcoin, Blockchain.com; and for other cryptocurrencies, there are specialized services.
2. Enter the transaction hash in the search bar
   Each transaction on the blockchain has a unique hash. Simply copy and paste it into the search bar on the chosen explorer’s website. The hash is typically a long string of characters.
3. View transaction information
   After entering the hash, a page with transaction details will open. You will be able to see:

• Status — whether the transaction has been successfully completed or not. 
• Amount — how much money was transferred. 
• Fee — what charge was applied for processing the transaction. 
• Processing Time — when the transaction was sent and confirmed. 

4. Check Additional Details
   In some cases, you can find even more information, such as the number of confirmations, the addresses of the sender and recipient, as well as other data that may be useful for confirming the legitimacy of the transaction.

This process allows you to easily verify whether your transaction has been completed successfully and what details correspond to it. All you need is the hash and a bit of time!

Transaction Hash in Various Blockchains

The transaction hash is used across different blockchains, but the hashing methods may vary depending on the blockchain system.

1. Bitcoin

Bitcoin uses the SHA-256 (Secure Hash Algorithm 256-bit). This is one of the most reliable and widely used cryptographic algorithms. It converts input data into a unique fixed-length hash (256 bits), ensuring a high degree of security for the entire Bitcoin network. This algorithm has been in use for many years and is fundamental to the network’s security.

2. Ethereum

Ethereum employs the Keccak-256 (often referred to as SHA-3). This is also a cryptographically secure algorithm chosen for Ethereum because it differs from SHA-256, adding an additional level of security and uniqueness for operations on the network. Keccak-256 also produces hashes of 256 bits in length but with slightly different cryptographic properties, making it an excellent choice for decentralized applications (dApps) and smart contracts.

3. Binance Smart Chain (BSC)

Binance Smart Chain uses the same hashing algorithm as Ethereum — Keccak-256. This makes BSC compatible with Ethereum and allows the use of the same tools and libraries for working with hashes and transactions. Importantly, despite the similarities with Ethereum, BSC can offer faster and cheaper transactions thanks to its consensus model (Proof of Staked Authority — PoSA).

Differences in Hashing, but Common Goals

Although hashing algorithms may differ across various blockchains, all aim to ensure the uniqueness of hashes for every transaction. This makes blockchains reliable and secure, as even the smallest alteration in transaction data will lead to a radical change in the hash, which cannot be hidden from other network participants.

Thus, regardless of the system used, the transaction hash remains the foundation of security and transparency in the blockchain, protecting users from fraud and forgery.

Possible Issues with Transaction Hashes

While the transaction hash is an important and reliable tool for tracking operations on the blockchain, there can sometimes be issues that prevent you from seeing the necessary information. Here are some common problems and tips for resolving them:

1. The Transaction Does Not Display

This is one of the most frequent issues. A transaction may not appear in the blockchain explorer for several reasons:

• The Transaction Has Not Yet Been Confirmed. In the blockchain, a transaction may remain in an unconfirmed state until miners or validators add it to a block. This is especially true for blockchains experiencing high traffic. 
• Network Error. Sometimes, due to technical issues on the network or the blockchain explorer’s side, the transaction may not display. 

What to Do?

• Check whether the hash was copied correctly. 
• Try waiting for a while, as the transaction may be in the process of confirmation. 
• Try using another blockchain explorer, as sometimes one explorer may be slow or have issues updating data. 

2. Errors while Copying the Hash

If the transaction hash was copied incorrectly (for example, due to a typo or accidentally omitting a character), the blockchain explorer will not be able to find the required transaction.

What to Do?

• Ensure that the hash was copied fully and accurately. 
• If you copied the hash manually, double-check it again or use the ‘copy’ function on the site to avoid errors. 

3. The Transaction Does Not Display Even After Confirmation

If the transaction was confirmed but still does not display, this may be due to the blockchain explorer not updating its data or some technical malfunction.

What to Do?

• Use another blockchain explorer for verification. 
• Check the transaction status through other means, such as official wallet applications or monitoring services.

The Future of Transaction Hashes

Transaction hashes already play a key role in ensuring the security and integrity of data in blockchain networks. However, as technologies and new cryptographic approaches advance, their significance will only increase. Let’s look at some potential changes that may occur in the future:

1. New Cryptographic Algorithms

With the development of cryptography, we can expect the emergence of new, more efficient, and secure hashing algorithms. These algorithms will not only enhance transaction security but also ensure faster data processing. New methods may arise that work more quickly and with lower computational costs, positively impacting transaction confirmation speed and reducing their cost.

2. Scalability and Performance

One of the main challenges for blockchain networks remains scalability. In the future, with the implementation of technologies such as sharding, parallel chains, and layered solutions, the transaction hash will become an even more critical tool for ensuring security while processing large volumes of operations. These solutions will allow blockchains to handle thousands, and possibly millions, of transactions per second while maintaining a high level of data security.

3. Improved Consensus Algorithms

Currently, most blockchain networks use consensus algorithms such as Proof of Work (PoW) and Proof of Stake (PoS). However, new algorithms may emerge in the future that are even more efficient in terms of energy consumption and transaction processing speed. The transaction hash will be closely linked to these improvements, ensuring the uniqueness and security of data in new types of consensus models.

4. Next-Generation Blockchains

Blockchain will continue to evolve. In the future, blockchain systems with flexible customization capabilities will emerge, allowing the selection of optimal cryptographic algorithms, including new hashing methods, depending on the needs of specific applications and industries. For example, blockchains for financial transactions, medical data, or supply chains may utilize different hashing methods for maximum protection.

5. Integration with Other Technologies

In the coming years, blockchain and hashing will closely integrate with technologies such as artificial intelligence (AI) and the Internet of Things (IoT). The transaction hash may become an integral part of automated systems and processes where data security is critical. This will open new opportunities for protecting transactions across various fields, such as autonomous vehicles, smart contracts, and blockchain for financial technologies.

In summary,

The future of transaction hashes in the blockchain promises to be bright and full of new possibilities. The enhancement of cryptographic algorithms, the development of scalable solutions, and new types of consensus models will make transaction hashes not only more efficient but also even more secure. This will facilitate the continued development of blockchain technologies, making them even more important tools in various industries and areas of life.

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