TXID - Transaction ID
A TXID also known as a transaction ID or transaction hash is a unique string of characters given to every single transaction that is verified and added to a crypto blockchain such as Bitcoin or Ethereum.
A TXID or transaction ID is a vital piece of information on a blockchain. Every single transaction that is verified and added to a blockchain like Bitcoin or Ethereum is allocated a transaction ID or TXID. Think of it as something similar to a booking reference number when you book a flight or a hotel room. Every booking reference number is unique and allows the airline or hotel to identify your booking and proves that you have paid for the flight or hotel room.
Whenever we ever buy anything over the internet there is always some form of order confirmation number that signifies to us that the order was processed correctly. In pretty much the same way a TXID confirms that the desired transaction was correctly processed and recorded on the blockchain network.
There are some very important distinctions to be aware of when comparing the booking of a flight, hotel room, or say a purchase on Amazon to a blockchain transaction. In all of the other cases, there are usually customer service departments with people on the other side to talk to in the event that a transaction isn’t processed correctly. In most cases, with crypto, there is no person on the other side, the blockchain software and logic takes care of everything and if something goes wrong it can get tricky or maybe even impossible to set right. Secondly, a blockchain transaction could potentially represent a significant sum, maybe thousands, hundreds of thousands or even millions. With those values at stake, it’s essential that the mechanism behind the TXID is rock solid and reliable and that transactions are permanently and securely stored.
With this in mind, it’s reassuring to know that blockchains use something known as a double 256-SHA hash. This is a very long string of numbers and letters and very difficult to hack.
What is a TXID exactly?
A TXID or Transaction ID is a string of letters and numbers that is able to identify a particular transaction on a blockchain network. The string is a double of the SHE-256 hash of a transaction.
Whenever a transaction is signed the TXID of that transaction is actually signed. This ensures that if any part of that transaction is changed, the transaction ID will change rendering the signature invalid. This provides an additional safeguard to ensure that nothing gets tampered with. This ultra-high level of security combined with transparency makes crypto pretty unique in the world of finance at least.
Below are a couple of famous examples of transaction IDs (TXIDs to see what they look like
The first-ever Bitcoin transaction
One of the most famous is the very first Bitcoin transaction between the pseudonymous inventor of Bitcoin, Satoshi Nakamoto and Hal Finney, an early Bitcoin contributor, cryptographer, cypherpunk and developer. Hal Finney received 10 Bitcoin on 12 January 2009 at 3.30 am GMT, at that time literally worthless and today would be worth in excess of €2.6 million!
You can view this historic transaction on blockchain.com by visiting: https://www.blockchain.com/btc/tx/f4184fc596403b9d638783cf57adfe4c75c605f6356fbc91338530e9831e9e16
The worlds most expensive pizzas!
On 22nd May 2010, computer programmer Laslio Hanyecz posted on the at the time the only Bitcoin form, Bitcointalk
“I'll pay 10,000 bitcoins for a couple of pizzas...Like maybe 2 large ones so I have some leftover for the next day”
Yes, 10,000 bitcoins!
In those early days, 10,000 bitcoins were worth around 41 USD. A bitcointalk user on the forum accepted the challenge and provided a very hungry Laslio with the 2 pizzas netting himself a small profit. Today, in 2021, those 10,000 bitcoins would be worth in excess of 545 million EUR! Yes, you didn’t read that wrong! Those are two very expensive pizzas! Due to the historic magnitude of this transaction, 22nd May is now known in crypto circles as Bitcoin pizza day.
You can view the pizza order transaction id here to see what it looks like: https://www.blockchain.com/btc/tx/cca7507897abc89628f450e8b1e0c6fca4ec3f7b34cccf55f3f531c659ff4d79
A transaction ID or TXID is a highly secure identification of a transaction that has been verified on a blockchain network like Bitcoin or Ethereum. It is practically impossible to successfully fake transactions on a blockchain and this ultra-high level of security combined with complete transparency, where any person can look up the public information of any transaction makes blockchains very interesting as a highly secure, global, transactional technology. For now, though, all you need to know is that a transaction ID or TXID is the confirmation that your transaction was recorded correctly on the blockchain and that everything went as it should. In addition to learning about what a TXID is, it’s also worth remembering the pizza story the next time someone offers you virtually worthless crypto for some pizza, who knows, maybe that same crypto could be worth millions in a few years time!