Blockchain Technology vs Cryptocurrency: Know The Difference
In the business world, people have a lot of confusion regarding Blockchain and Cryptocurrency. Well, they both are different terms often employed interchangeably.
Cryptocurrencies are digital currencies that make use of Blockchain as a ledger for stowing records of crypto transactions. Whereas, Blockchains have many benefits beyond cryptocurrencies which includes storing and accessing medical data, supply chain & logistics, and financial records.
To help you better understand here in detail, I have explained a few crucial things related to Cryptocurrency vs Blockchain technology.
So, let’s get started!
It is one of the trending technology which is used to store records or electronic databases using a distributed ledger system. Blockchain technology stores enormous amounts of data in (such as Cryptocurrency transaction records) blocks, groups, or hashes.
These blocks are distributed across numerous computers or a “distributed ledger.” Once each block reaches its storage limitation, it is “chained” to a block loaded previously, and a new block comes into service.
A Blockchain ledger includes two sorts of records, individual transactions & blocks. The primary block comprises a header and information related to exchanges occurring within a set time. The block’s timestamp is utilized to make an alphanumeric string called a hash.
After the primary block has been made, each resulting block in the record utilizes the past block’s hash to compute its own hash.
Before adding another block to the chain, its authenticity should be checked by a computational cycle called consensus or validation. Currently, in the Blockchain process, a bulk of nodes in the network must consent that the new block’s hash has been calculated accurately. Consensus guarantees that all duplicates of the Blockchain distributed ledger share a similar state.
When a block has been added, it can be referenced in ensuing blocks but cannot be altered.
If somebody endeavors to trade out a block, the hashes for past and ensuing blocks will likewise change and disturb the record’s common state.
At the point when consensus is not conceivable, different PCs in the organization know that an issue has happened, and no new blocks will be added to the chain until the issue is settled.
Normally, the block causing the mistake will be disposed of, and the agreement cycle will be rehashed.
Pros And Cons Of Using Blockchain
- Network distribution
- Low costs for users
- High implementation costs
- Private keys
A Cryptocurrency is a digital store of value primarily for buying and selling services, goods, or property. Popular examples include Bitcoin, Ethereum, and Litecoin.
No centralized authority issues or controls these digital currencies, so they are cryptographically protected against counterfeiting. Moreover, Cryptocurrencies are also known as tokens or coins.
Cryptocurrencies operate on a distributed public ledger known as Blockchain, a record of all transactions revamped and held by cash holders.
Units of digital currency are made via mining, which includes utilizing the PC’s ability to take care of muddled numerical issues that produce coins. Users can likewise purchase the monetary forms from agents, then store and spend them utilizing cryptographic wallets.
Assuming that you own cryptographic money, you own nothing unmistakable. What you own is a key that permits you to move a record or a unit of a measure starting with one individual to another without an authorized third party.
Moreover, Bitcoin has been around since 2009, cryptocurrencies & applications of Blockchain technology are still emerging in financial terms, & more benefits are anticipated in the future. Transactions involving bonds, stocks, & other financial assets, could ultimately be traded utilizing technology.
Pros And Cons Of Using Cryptocurrency
- Protection From Inflation
- Self-governed & Managed
- Simple Currency Exchange
- Illegal Transactions Can Be Done
- No Refund Or Cancellation Policy
- Susceptible To Hacks
Blockchain Vs Cryptocurrency: Similarities Between Both
The factors explained below will help you know the similarities between Blockchain technology vs Cryptocurrency.
Blockchain technology and cryptocurrencies are both intangible. Cryptocurrencies are intangible digital coins that no one can hold physically, like the US dollar or the Indian rupee.
The Blockchains utilized for storing cryptocurrencies do not exist in a single area or the form of a physical data center.
Cryptocurrencies and Blockchains are technologically advanced. Blockchain is the underlying technology behind cryptocurrencies. Blockchain is more refined and secure than traditional databases.
On the other hand, Cryptocurrencies are more advanced in comparison with physical or paper-based currencies.
Blockchain came into reality to record bitcoin transactions (the world’s first cryptocurrency). All major cryptocurrencies have Blockchains for storing transactions.
For example, if someone buys a new bitcoin, its data related to the transaction will be recorded in a bitcoin Blockchain.
Difference Between Blockchain Technology and Cryptocurrency
Well, Blockchain platforms without Cryptocurrency do exist — and may also be a better bet for some use cases. We can say Cryptocurrency is merely an app running on top of a Blockchain. The model changes in some way without Cryptocurrency (coins), but it’s still possible to build a valuable platform. Here are the few major differences between both:
1. Monetary Value
All cryptocurrencies, whether Bitcoin or Ethereum, have their own economic value. You must have heard of Bitcoin hitting a high of $65,000 or Ether reaching $4,000. Whereas, Blockchain does not have any monetary value.
Blockchain technology is used for recording transactions in MedTech, FinTech, as well as logistics. On the other hand, Cryptocurrencies are digital tokens, or digital money, used for buying goods & services, plus they can be used for investment too.
Being a public ledger, Blockchain is highly transparent. Anyone can join a Blockchain network & view the data which is available. On the other hand, cryptocurrencies offer anonymity, meaning no one can know or see the source or destination behind the transaction.
Blockchain technology is completely decentralized and distributed worldwide, meaning there is no particular location where data is recorded. On the other hand, cryptocurrency is a part of the Blockchain and can be accessed using smartphone wallets. Say you have an Ethereum wallet; it can be used at any location for transaction purposes.
As we all know, that Blockchain is one of the hot topics around the business world, so several people are just exploring this technology. People often confuse Blockchains with cryptocurrencies. Some tend to believe that they are just synonyms.
Hopefully, this “Blockchain Technology vs Cryptocurrency: Know The Difference” blog will help differentiate between the two.
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