Before discussing Blockchain vs cryptocurrency, let us first look at “what is blockchain” and what is cryptocurrency.” Blockchain and cryptocurrency get frequently used interchangeably. Nonetheless, there is a notable contrast between the two. Cryptocurrencies utilize blockchain as a catalog to hold crypto transactions logs. However, blockchains include multiple purposes, such as reserving and accessing medical data.
A blockchain is a set of records or an electronic database, like a spreadsheet. Therefore, it carries more significant amounts of details, such as cryptocurrency transaction records. Thus, it is kept in “blocks” or groups, unlike a standard spreadsheet.
These blocks get spread across numerous computers or a distributed ledger. Thus, once each block reaches its storage limit, it is “chained” to a previously sufficed block, and a new block becomes a benefit.
It has 4 key features. They are as follows,
- So, no one can change or influence how a blockchain should act.
- A distributed ledger to brace against scams and more comfortable management.
- Minting of coins is a familiar scenario. One could consider mining Bitcoins as coin minting.
- Tamper-free ecosystem.
Blockchain technology proposes a genuinely decentralized framework for stakeholder regimes. Thus, this puts decision-making abilities in the hands of someone with no central authority. With the Maker Protocol, no primary administrator serves as an arbitrator. Also, MKR token holders manage the system to ensure stability. Therefore, MKR holders desire to preserve the system’s health and protect it from dangerous proposals.
Centralized commodities presently defeat the financial world. Companies rely on these to affirm data and settle dealings ethically and accurately. Yet, these entities are weak to exploitation. The immutable nature of the blockchain destroys the opportunity for inner actors to exploit data for their use.
The transparency of blockchain lets anyone examine every trade and then make conclusions based on visual action. Like immutability, transparency can also force bad actors to think twice.
Blockchain transaction logs are over a web of computers, so there’s no single juncture of failure. Therefore, that drives it too difficult for hackers to penetrate. Also, security methodologies, such as mnemonics, enable crypto wallets’ protection.
Cryptocurrencies are digital funds with demand value like other currencies. Therefore, it can also be in use as a store value like gold. The first cryptocurrency was Bitcoin which evolved blockchain technology.
Later, other cryptocurrencies, such as Ether, developed their blockchains (Ethereum).
There are some standard properties of the cryptos,
- Irreversible means no way back when the transaction is made.
- Quick and secure.
- One doesn’t need to request permission to give or take money from someone.
- The market supply is precisely controlled. There are only limited bitcoins on the planet.
- Based on the IOU system, there are no debts.
Low Transaction Fees
Transaction costs are tiniest as transfers are peer-to-peer and need no centralized mediators. For instance, a global fund transfer utilizing a centralized bank would contain fees linked to converting funds. Therefore, decentralized systems do not levy currency conversion fees.
Centralized controls and third parties raise transaction times as a procedure. Cryptocurrency fixes this by allowing nearly instant peer-to-peer transactions.
Companies usually deal with outsiders when purchasing and peddling things across geographic boundaries. Thus, this can open the door for fraud. There will always be someone who will try to scam a system. Thus, the technology behind cryptocurrency helps handle fraud risks. Thus, transactions made on a blockchain are delicate and cannot be changed.
Cryptocurrency holds decentralization to balance financial infrastructure permit across different boundaries. Also, this benefits the underserved. However, anyone can access crypto anywhere without a central authority’s interference.
Both blockchain and cryptocurrencies are intangible. However, Cryptocurrencies are intangible digital passes. One cannot carry these physically like the US dollar or the Indian rupee. Thus, the blockchains utilized for keeping cryptocurrencies do not exist in a single area or one physical data center.
Both blockchain and cryptocurrency technologies have technical advancements. Blockchain is the underlying technology after cryptocurrencies. Thus, it is vastly more refined and safer than conventional databases. Cryptocurrencies are more technologically advanced than physical or paper-based currencies.
Blockchain came into the presence to register Bitcoin transactions. All significant cryptocurrencies have blockchains for recording transactions. If an individual purchases a new bitcoin, it gets recorded in a bitcoin blockchain.
Blockchain is a repository technology for holding data on decentralized webs. Cryptocurrency is a medium of swap like the US dollar. Therefore, a blockchain can have diverse types of details beyond cryptocurrency transaction logs.
All cryptocurrencies hold a monetary value. One must have heard of Bitcoin shooting a delight of 65,000 dollars (around 48 lac rupees) or Ether getting 4,000 dollars (about 3 lac rupees). However, a blockchain does not hold any monetary value.
Blockchain technology has benefits above cryptocurrencies. Blockchain can record transactions in banking, healthcare, etc.
Cryptocurrency is digital money for buying goods and services and investing.
Blockchain technology is decentralized and spread all over the world. There is no single place for storing all logs of a blockchain. However, cryptocurrencies are accessible via mobile wallets. If one has a bitcoin wallet, one can utilize it anywhere for transacting with partakers accepting bitcoins.
Blockchain is admiringly transparent. Anyone can enter a blockchain network and view the details available. However, cryptocurrencies present obscurity. Hence, as everyone sees the source/destination of a bitcoin trade, no one can understand who is behind the transaction.
Blockchain continues to conquer the internet spaces. It is possibly essential to exert caution when dealing with cryptocurrencies. For instance, if one pursues crypto gambling, use trustworthy service providers. Due to intricate structures, Bitcoin and blockchain technology remain under or unregulated globally.