A recent tweet said this about Bitcoin and the Bitcoin blockchain:

“btc is open-source and decentralized. the public bitcoin blockchain is a permanent record for audit by anyone. it contains every btc transaction throughout the entire history of the network going back to the original transaction in 2009 (or "genesis block").”

When people speak about Bitcoin and the Bitcoin blockchain as the perfect audit trail, they speak about its perfect visibility and transparency - that every transaction from the beginning of Bitcoin is available for audit. When relying upon the Bitcoin blockchain (or, really, any other blockchain) for transparency of audit information, it is important to recognize that the visibility of every transaction is not necessarily what it is promised to be.

Yes; it is a tautology to say every transaction that is written to the Bitcoin blockchain is available on the Bitcoin blockchain. But that doesn’t mean every activity related to Bitcoin - what you and I might argue is a transaction for Bitcoin - is written to the Bitcoin blockchain.

Here’s a few reasons why:

• Aggregation of transactions

When you buy or sell Bitcoin from Coinbase, Kraken or a similar resource, and leave it on the exchange, that organization does not necessarily write every transactions to the blockchain. They more likely aggregate a number of the transactions and a transaction is written in the aggregate. So a lot of buying and selling is going on, but the individual activity is not finding its way in detail to the blockchain.

• Lightning Network[1]/Layer 2 payment protocols

The Lightning Network promises instant payments, scalability, and low cost. How? By transacting and settling off-chain. Claiming the ability to conduct “millions to billions of transactions per second across the network”, these transactions are not written to the Bitcoin blockchain. Tracing activity from the Bitcoin blockchain to the Lightning Network obscures activities.

• Wrapped Bitcoin, renBTC Huobi BTC

Not off-chain, necessarily, but a different chain (probably Ethereum). And why do CoinMarketCap and CoinGecko double count BTC on its own, and then another $8B USD of BTC put aside and supporting BTC represented on Ethereum? It’s Bitcoin, but with the “advantages” of Ethereum. So a BTC transaction, if you will, but on another blockchain completely.

So we can talk about the great benefit of BTC and how you can see every transaction. And it is literally true - every transaction written to the Bitcoin blockchain is on the Bitcoin blockchain and can be seen. But there's much more going on, and not every Bitcoin (related) activity is written to the Bitcoin blockchain. It's what's not there that may be especially interesting.

[1] https://lightning.network/