10 July 2020
Still lost with regards to Cryptocurrency, Bitcoin, and Blockchain? Whether they are different or they are the same? To keep it short, we will say that they are different. Here's a quick clarification- What they are? Why they are different? And how they differ from each other?
A while ago, when bitcoin was just a single popular digital currency, the words blockchain and bitcoin were utilized inversely. But as different types of cryptocurrencies emerged in the global market, it became necessary to get a different meaning. Blockchain refers to distributed technology containing “chain of blocks”. Each block includes the data of the transaction made. This data is bundled together, verified and permanently recorded in the distributed ledger i.e. Blockchain. On the other hand, cryptocurrency represents the tokens that are exchanged in a blockchain network. These tokens have monetary value and can be used for sending, receiving, investing and can be used to do payments.
Let’s get in a deep differentiation:
A decentralized technology which records cryptocurrency transactions
A virtual currency used in transactions on a blockchain
A technology that runs the cryptocurrency transactions
Used in blockchain to make payments, investments, and storage of wealth
No monetary value
They have monetary value and can be used as a measure of wealth
They are non-transferable
They can be transferred.
This was the crux difference between the two. Now, let’s understand how they work?
The blockchain is a technology on which the cryptocurrencies are made to play. It serves as a distributed ledger, forming a network. This network acts as a medium for the transaction. Cryptocurrencies are the tokens used to send or pay for the transaction within the network. Cryptocurrency can be the digitized value of an asset or used as a tool on a blockchain. Thus, they go hand-in-hand because the blockchain serves as a technology in which cryptocurrencies is the part of the system and without cryptocurrencies; any transaction is not possible on the blockchain.
Hence, even if the Cryptocurrency is not the same as Blockchain, yet they work together for a Bright Future.