How Are Blockchain, Cryptocurrency, and Bitcoin Different?
What is Blockchain?
A blockchain is an immutable and decentralized distributed ledger consisting of all the transactions across a peer-to-peer network.
With blockchain technology in place the participants in the network confirm the transactions without the intervention of any third party or central authority.
This marks transparent transactions without having to worry about any third party intervening in between and hampering the transaction records.
The sectors that have adopted the use of blockchain technology are blockchain applications, supply chain tracking, healthcare, and many more.
It is adopted by almost every sector because of its ability to be incredibly secure without any chance of getting tampered with.
Features of Blockchain
- Blockchain is open and accessible to everyone.
- Blockchain is a decentralized and distributed public ledger, which no single authority has control over.
- Anyone can check the transaction’s validity as each node involved in the computer maintains a copy of each transaction.
- It is highly efficient, fast, and scalable.
- It cannot be tampered with or altered as once the record has been registered, it stays there permanently.
What is Bitcoin?
Bitcoin is a digital peer-to-peer currency that is one of the earliest cryptocurrencies introduced in the cryptocurrency.
Bitcoin is speculated to be developed by a pseudonymous individual or a group referred to as “Satoshi Nakamoto.”
Bitcoin aims to make transactions a lot quicker and encrypted without much intervention from the central bodies or government.
Bitcoin is mined using the specialized mining hardware known as ASICs, where the computers are connected around the world to make transactions and keep track of these transactions using a public ledger and nodes, keeping the user’s identity anonymous.
Those who mine Bitcoin are known to be the miners, which can be done solo or in a pool for greater outputs.
Features of Bitcoin
- It is completely decentralized and free from any third-party intervention, which means there is no vulnerability to corruption or risks.
- It uses a ledger that is seen and maintained; however, it keeps the identity and amount anonymous for security purposes.
- It can process the transactions faster; however, it can delay sometimes if the traffic within the network is high.
- It is highly volatile, and its value keeps changing from time to time with the impact of factors such as demand, availability, and any important event.
- It is highly immutable, and anything happening in the network cannot be reversed.
What is Cryptocurrency?
A cryptocurrency is digital money that is a medium of exchange, created, stored, and shared electronically using cryptographic techniques and has a predetermined supply.
The government does not regulate it and is not in the possession of any central authorities, which means there are no transaction costs which are imposed generally by the banks as intermediaries.
Cryptocurrency payments only exist as digital entries to an online database detailing particular transactions rather than as actual cash that is carried around and exchanged in the real world.
Due to its immutable, decentralized, and encrypted nature, cryptocurrencies have won their place all around the world, and it is the future now.
Features of Cryptocurrency
- It has lower transaction costs and a faster transaction rate.
- It is decentralized and there is no intervention of any conventional bank or government.
- Due to the increased privacy and safety of cryptocurrency, it offers great protection against any potential scam or fraud.
- It is immutable, which means no one can make any changes, and anything that is done and verified once cannot be undone.
Difference between Bitcoin and Blockchain
Bitcoin is different in several ways from blockchain. Bitcoin is a cryptocurrency whereas blockchain is a distributed ledger consisting of a database.
You must know that Bitcoin is based on the concept of blockchain technology and is powered by it; however, Blockchain has many applications beyond simply Bitcoin.
The identity of the Bitcoin is anonymous, and everything in between is encrypted; their blockchain is all about transparency. It is because of this that due to blockchain’s wider application across multiple sectors, it requires businesses or a few sectors to know their customers.
Also, as Bitcoin transfers money between the users, blockchain can be used to transfer a wider range of things, such as information or data, to ownership rights.
Difference between Blockchain and Cryptocurrency
Blockchain is a technology that is required to store and save important information and data on decentralized networks. In contrast, cryptocurrency is a digital coin used as a medium of exchange like any fiat currency.
Cryptocurrency stores the transaction records. However, blockchain goes beyond that and stores all kinds of information.
Also, all cryptocurrencies hold a monetary value. However, blockchain has none.
Cryptocurrency can be used to buy all kinds of goods and services, whereas Blockchain is used to record financial data as well as other forms of data in all sectors like healthcare, banking, supply chain, and more.
The one reason why cryptocurrency is accepted worldwide is its anonymity; however, blockchain, being a public ledger, is extremely transparent.
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