When someone talks about blockchain, you straight away think of bitcoin and vice versa, have you ever felt this? You definitely would, if you’re a newbie to this topic. In a way, both the terms are same same, but different. Meaning, bitcoin is blockchain technology but blockchain technology is not only bitcoin.
Well, to put in simple words, it is like how most of us would refer to ‘Colgate’ when talking about toothpaste, ‘Clorox’ for bleach, ‘Maggie’ for instant noodles and so on. Since bitcoin is the first cryptocurrency, people tend to refer that blockchain to bitcoin instantaneously.
What Is Blockchain?
The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. Each transaction is digitally signed to ensure its authenticity and that no one tampers with it, so the ledger itself and the existing transactions within it are assumed to be of high integrity.
Blockchain, which began to emerge as a real-world tech option in 2016 and 2017, is poised to change IT in much the same way open-source software did a quarter-century ago. Based on a peer-to-peer (P2P) topology, blockchain is a distributed ledger technology (DLT) that allows data to be stored globally on thousands of servers – while letting anyone on the network see everyone else’s entries in near real-time. That makes it difficult for one user to gain control of, or game, the network.
To put in simple words, a blockchain works the same way the Google spreadsheet works, just that it is not possible to be edited. Basically, anybody can have the access to view the spreadsheet but none can actually edit it. As the word blockchain says it all, it is literally a chain of blocks linked together, where each block contains a piece of data, where the blocks keep adding as transactions happen.
Now, What Is Cryptocurrency?
Cryptocurrency or crypto is basically a digital currency that you can either use to buy anything or invest on, like your typical money. Simply put, instead of taking out ringgits from your wallet, you’ll have an e-wallet that contains your cryptos which you can use for purchasing like you use the online banking services.
Normally when you use your ringgits that are reserved in banks and to withdraw them you need to get the approval of the bank or do a transaction at the ATM. Not only that, you still need approval from the bank even to make a payment online.
So, with cryptocurrency, you will not need any approval from any party as it relies on the blockchain technology which is decentralized or no single entity is in charge of it and the transactions are confirmed by the computers in the network.
It is well-known that the first-ever cryptocurrency to be created is the bitcoin and it is famous because that is probably the most heard coin among the other 2,000 over coins.
So, What Is Bitcoin?
Bitcoin is the first product of the blockchain developed by some anonymous entity who went by the name of Satoshi Nakamoto. Satoshi released the idea of Bitcoin in 2008 and described it as a “purely peer-to-peer version” of electronic money.
The first transaction took place between Nakamoto and an early adopter of bitcoin in January 2009. The first real-world transaction happened in 2010 when a bitcoin miner bought two pizzas from a Papa John’s in Florida for 10,000 bitcoins.
Bitcoin is like gold in many ways. Like gold, bitcoin cannot simply be created arbitrarily. Gold must be mined out of the ground, and bitcoin must be mined via digital means. In fact, there are only 21 million bitcoins that can be mined in total. It is notable that about 18 million bitcoins have been mined, leaving under 3 million more.
The blockchain technology is a ledger whereas bitcoin is a digital currency. Blockchain aims to provide a low cost, safe and secure environment for peer-to-peer transactions whereas, bitcoin aims to simplify and increase the speed of transactions without much of government restrictions.
Blockchain can be adapted to any changes, hence it can cater to different industries whereas, bitcoin focuses on lowering the cost of influencers and reduces the time of transactions. Therefore, the scope for blockchain is more open to changes and hence has the backing of many top companies, unlike bitcoin which is limited.
In a nutshell, both blockchain and bitcoin have their own uniqueness and strengths with thousands of cross-border transactions taking place every day, in order to make things easier for people.
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