Are you one of those who are using Bitcoin and Blockchain terms interchangeably? Many people assume they both are the same, probably because they are so closely related!
If you are wondering what on earth the difference between the two is, this comprehensive article is for you.
Let’s quickly understand what they are!
Assume Blockchain as a bank database, Cryptocurrency as money, and Bitcoin is US Dollar like in the below picture.
In simple words, Bitcoin is the first and most popular example of a cryptocurrency proposed by Satoshi Nakamoto in 2009 to make electronic payments without any trusted-intermediaries. Blockchain is the technology for maintaining the transactions of Bitcoin on a distributed ledger in a peer-to-peer system which is anonymous and permissionless. Blockchain which is cryptographically hashed makes the content of ledger immutable and works on the basis of a consensus algorithm where at least 6 members in the network have to approve for change of the data. Thus, Blockchain is secured using Byzantine fault tolerance and solves the ‘double spending’ issue (any digital money can be spent multiple times). It uses “smart contracts” to formalize digital relationships.
When a user uses Bitcoin for buying or selling, those transactions made in Bitcoin are verified by a network of computers. Bitcoin protocol is an open-source program code that users run as “wallet” and solve a complex mathematical problem, called a “hash.” Once the transaction is completed, it is recorded publicly and stored as a block on the blockchain. Computers that successfully verify blocks are rewarded for their labor with Bitcoin and are called “miners”.
Though they depend on each other, their functionality varies. While Bitcoin is limited to the financial sector, blockchain technology can be programmed to record virtually anything of value from currency to information.
Top 6 Differences Between Bitcoin and Blockchain
Below visual representation depicts the major differences that can be simmered down between Bitcoin and Blockchain.
This pretty much gives you an idea about what are Bitcoin and Blockchain and how they both are different.
I can conclude by saying, in simple words, though there are minimal differences, their common goal is “to make people’s lives easier”.
Do you think differently? Please comment below.