These two seemingly similar names are in fact quite different terms. They may be confused by people just starting their adventure with cryptocurrencies. It is customary to use the term Bitcoin, speaking of Blockchain technology. In fact, these names should be used in separate situations. Starting the adventure with cryptocurrenciesand blockchain technologies it is necessary to know the differences between them. About this in the following article.

A significantly shallower analogy

Let us assume the following facts:

  • Websites are a specific technology for providing information;
  • Search engines are the most popular way to use websites;
  • Google is the most popular search engine.

By reference to the subject:

  • Blockchain is a technology used to record information in block form;
  • Cryptocurrencies is the best-known way to use blockchain technology;
  • Bitcoin is the first and most popular example of crypto currency.

Blockchain concept (Blockchain)

Most of the blockchain network by design is of a distributed and decentralized digital book type. Blockchain is simply an electronic, digital accounting book. The information it contains concerns the recording of transactions within the network.

Specifically, blockchain is a linear chain made up of many interconnected blocks. This technology can be used in other activities, including those not related to financial operations, which require the permanent recording of transactions in the network.

The features of blockchain networks are decentralisation and dispersion. What does this mean? It looks similar to typical accounting books such as a phone book or transactions of a given user visible on the auction profile. An organizational unit is responsible for the books containing data, e.g. a government agency or the owner of the portal. Both the former and the latter are examples of non-dispersive and centralised data ledgers. They usually have one copy, are based on a single database and are maintained by a single entity.

However, the Blockchain network is built in a distributed way. Its operation resembles decentralised books. This means that there is no physical copy of the book and no regulatory body. To put it simply, a user who joins and participates in the process of blockchain network operation has a copy of blockchain data in an electronic version that is subject to updating. This process takes place in synchronization with other users’ data.

 

Thanks to the collective work of all users, this distributed system still works. These users are called network nodes and participate in the process of validation and verification of transactions. Therefore, the dictionary power over the network is divided among all network users. Simply put, it is decentralized.

Blockchain practice

The Blockchain name comes from the way the records in the registry are organized, according to the string of blocks in the data. Individual items contain a list of transactions. They are visible and publicly available. Unfortunately, they cannot be changed. Blocks that are added to the string in succession form a block record.

The main reason why blockchain network modifications are difficult is because blocks are connected to each other and protected. Creating new blocks is an expensive computing activity called mining. Miners verify transactions and group them into new blocks, which are added to the chain. They are also responsible for entering new cryptocurrency units, assigned to them as remuneration, into the system.

Each new block is associated with an existing blister. It is not possible to modify the previous block because it is protected by mathematical principles and cryptographic evidence. Their solution is more and more difficult with the addition of new blocks.

In short, blockchain is a chain of data blocks, ordered chronologically and secured by cryptographic evidence.

Cryptocurrency

Cryptocurrency is a form of money in a digital version. It is used as a means of exchange by network users. Information on cryptographic transactions is publicly available in the digital accounting book and can be exchanged between participants in the network in a peer-to-peer manner without the involvement of intermediaries.

The term ‘Krypton’ refers to cryptographic techniques that are used to secure a cryptographic system, to provide liquidity for the creation of new units and to validate transactions.

Although not all crypto can be dug out, many of them, such as Bitcoin, are based on digging. They are characterized by slow supply growth. Copying is a way to create new crypto units. It allows for the disappearance of the inflation phenomenon and threatens ordinary currencies such as GBP or USD.

Bitcoin

Bitcoin is the first cryptoCURRENCY to be created. It is the best known and the most media-oriented. It was created in 2009 thanks to an anonymous programmer or a group of programmers under the pseudonym Satoshi Nakamato. This crypto was created as a decentralized electronic payment system, secured by mathematical evidence and cryptography.