How Bitcoin differs from blockchain
In this photo illustration, a visual representation of digital cryptocurrencies, Bitcoin, Ripple, Ethernum, Dash, Monero and Litecoin is displayed. Photo: AFP
Bitcoin is making headlines globally, and people are profiting from trading this virtual currency. Moreover, this virtual currency is a new concept that people are keen to understand the difference between Bitcoin and Blockchain. However, many assume that Bitcoin and Blockchain are similar, as this digital currency was the first-ever blockchain application. However, since then, blockchain has undergone substantial technological changes and is catering to other industries besides the Bitcoin market. People may start learning the best strategies in Bitcoin trading by using a trusted trading platform such as Bitcoin Code
This article will help readers to differentiate between Blockchain and Bitcoin and their use in cryptocurrencies.
What is Blockchain?
Blockchain is a new technology that records and verifies buyer and seller transactions. Also, blockchain is a public distributed ledger restricted to this digital asset and allows people to share valuable data, transact, and securely pool their digital resources.
Additionally, many people assume that blockchain is a new technology. Still, it first came into existence in 1991 and became famous during this digital currency’s inception. Blockchain may be challenging to understand and regulate. This technology has three concepts. These concepts include;
- Miners are the ones who help to create multiple blocks. Miners also solve complex mathematical equations to earn rewards and transaction fees.
- Blockchain nodes help maintain the integrity and privacy of the Bitcoin network. Also, if anyone attempts to hack the blockchain, they will need the support of 51% of the nodes; hence, hacking is impossible. These nodes also help verify transactions that comply with the communities’ rules and regulations.
- Blocks are on every chain, and they contain information about the transaction. Additionally, each block has a unique hash and is stored linearly and chronologically at the end of the blockchain.
What is Bitcoin?
Bitcoin is one of the oldest but earliest cryptocurrencies using blockchain technology to facilitate peer-to-peer transactions. Bitcoin is entirely decentralized, meaning it does not have a central regulatory body. These electronic money transactions are less costly and fast than fiat currency.
When trading this virtual currency, you should register with a genuine crypto exchange that provides a digital wallet to send and receive the coins. This digital currency differs from physical money as a central banking system does not regulate and govern the currency.
Significant Differences Between Bitcoin and Blockchain
For one, blockchain is a technology, and this digital money uses blockchain for anonymous and secure transactions. Moreover, Bitcoin ensures that its users remain anonymous, and the blockchain is more transparent. Blockchain does not reveal its users’ addresses and identities when it records transactions. Therefore, that anonymity ensures that people cannot trace back transactions to their senders and recipients.
People have used blockchain technology extensively as many industrial sectors are adopting the technology. For instance, the health sector, tourism, banking, finance, and real estate have embraced blockchain technology to enhance better and more transparent records. On the contrary, this virtual currency works in crypto wallets and digital currency exchanges.
Additionally, blockchain transfers various things, including digital assets, rights, proprietary information, and much more. However, Bitcoin only moves digital currencies.
Importance of Blockchain
The essential importance of blockchain is the reduced operational costs. Blockchain eradicates the need for intermediaries, which cuts down costs. While transacting using banks, transactions go through many intermediaries requiring transaction costs. When all the transactions from different intermediaries are totaled up, they are expensive.
Also, without intermediaries, these digital money transactions are fast and instant. Therefore, Bitcoin users save much of their time, leading to cost savings.
Conclusion
Despite Bitcoin and Blockchain sounding quite similar, they have distinctive features. However, both Blockchain and Bitcoin are essential while transacting this digital money.
