Often we hear the terms ‘Blockchain’ and ‘Cryptocurrency’ interchangeably used and assume they are the same. But that is certainly not the case and one must know how blockchain and cryptocurrency influence and differ from each other.
Cryptocurrency and Blockchain
Cryptocurrency is a digital currency that has gained much popularity since Satoshi Nakamoto launched the first cryptocurrency – Bitcoin. He came up with a way to exonerate the main problem that faced the digital currency — possibility of getting replicated.
Satoshi invented the Blockchain technology using which Bitcoins could remain unique and decentralised from the government.
Blockchain technology facilitates the transfer of Bitcoins from A to B, making sure they don’t get duplicated and remain unique. For this, the transaction needs to be validated by the miners present on the blockchain network by checking if there is any change noticed when compared to any other transactions present on the ledger. If there is a change, it is written as a new transaction to the blockchain.
For every successful valid transaction written to the blockchain, miners are awarded some cryptocurrency for their contribution.
Like Bitcoin other cryptocurrencies, for example, Altcoins, also use Blockchain technology to better facilitate their functioning.
Other uses of Blockchain
Interestingly, Blockchain is not just used for cryptocurrency implementation, but also for businesses since it:
- Is cost effective
- Increases the speed of transactions
- Reduces overhead costs
- Makes the recorded transactions visible to everyone in the network
- Is tamper-proof as the transaction cannot be changed but only reversed whilst being visible to all
Blockchain for businesses — unlike Bitcoin blockchains — know exactly who participates in the validation process. They can restrict the exchange of data between specific people in the network.
Bitcoin blockchains are also slowly implementing such methodologies known as permissioned ledgers, to better secure transactions and avoid double spending.
Check out the Youtube video below that explains how Blockchain is changing money and business.