In recent years, many people started to take interest in investing the digital currency. But for newcomers, the digital currency and cryptocurrency terminology can be quite confusing and sometimes misleading too. Many refer to Bitcoin when there is a discussion about blockchain technology, whereas, in general others mention blockchain when discussing cryptocurrencies. Though, all these terms are not actually interchangeable; they refer to different but linked concepts. Hence, it is significant to know and understand the differences between them. So, in this post, we are giving you details regarding Blockchain and Crypto Currency as well as differences between them.
Blockchain
Blockchains are records that are distributed and secured by cryptography. In simple words, blockchain is a digital record that is mainly an electronic version of a paper ledger, and it is in charge to record a list of transactions. They are basically public databases where every person can add to as well as view the database.
More precisely, a blockchain is a linear chain of numerous blocks and these blocks are secured by cryptographic proofs. It copied the data across lakhs of computers or users all over the world and allows each computer to have an access to this database. These users are known as network nodes and as per the rules of the system, they take part in the process of verifying and validating transactions. The transactions are assembled into ‘blocks’ that are data-holding vehicles. So, the successive chain of every block ever accomplished makes up a blockchain. Moreover, the blocks, and transactions, are visible and public and cannot be altered. Also, for producing new blocks, participants required to engage in an expensive and exhaustive computational activity that is known as mining.
CryptoCurrency
In simple words, a cryptocurrency is a digital form of money that is used as a medium of exchange for purchasing and selling goods, services, and others within a distributed network of users. Different from traditional banking systems, the transactions are traced through a public digital ledger like blockchain and occur directly between the participants without involving mediators.
Furthermore, “Crypto” talk about the cryptographic methods used to secure the financial system. It also confirms that the formation of new cryptocurrency units, as well as the transaction validation, go in an efficient manner. On the other hand, the well-known examples of CryptoCurrency are bitcoin and litecoin. These popular digital currencies are cryptographically secured and are not controlled by any centralized authority. Additionally, any cryptocurrency that is launched as an independent digital option to currency is deliberated to be legal and also assure to pay the worth that comes in encrypted.
So, cryptocurrencies are widely referred to as coins or tokens. Its role has been developed from the string of circulated ledger technology. You might view cryptocurrency as a tool present on the blockchain network. Thus, it can be anything related to dealing with the buying, investment, sale, trading, or related financial features deals using a blockchain native token.
Difference between Blockchain and CryptoCurrency
Blockchains are known for enabling decentralized platforms which need a cryptocurrency. It is the technology that helps as the distributed ledger and also permits a network for maintaining an agreement. Besides, the consensus that is distributed enables the network to track transactions and allows the transfer of value and information.
Cryptocurrencies are the tokens used in these chain networks for sending value, pay for these transactions, and to provide network incentives as well. Also, one can see Cryptocurrency as a tool on the blockchain. In some cases, it serves as a resource or value, or to digitize the possession of an asset.
In simple words, Cryptocurrency is the chief and first application that is built upon the technology of blockchain that underpins the cryptocurrency Bitcoin. Therefore, to understand in a better way, we concluded:
- Blockchain is a particular technology that is used for recording information or data blocks. This is a distributed database of transactions ordered chronologically.
- Cryptocurrency is one of the well-known ways of using blockchain technology. Moreover, Bitcoin is the most popular example of a cryptocurrency.
Final Words:
Nowadays, the internet is playing a great role in blessing the world with access to lots of information related to currency and savings. So, Blockchain is working on altering how persons approach trades with trust. Hence, both Blockchain and Cryptocurrency are playing an important role in changing the global economy. Apart from this, we hope that this post will definitely help you in understanding more about Blockchain and Cryptocurrency and the difference between them.
