The most common topic of discussion these days is Blockchain vs. Cryptocurrency. Everyone wants to know whether they are similar or possess some difference. Now you must be thinking the answer for this very simple question.
Most of the people will tell you; that Cryptocurrency is the digital money, and Blockchain is the technology that drives it. De facto, the answer is not that simple.
Yes, there are some differences, but at the core Blockchain and Cryptocurrency are interconnected. Bitcoin (Cryptocurrency) is the first and most successful application of Blockchain. Initially, they were used interchangeably, but with advancement, some difference can be noticed.
In this blog, we will talk about how these two are different from each other.
What is Cryptocurrency?
Cryptocurrency is a digital asset that came into existence in the year 2008. It gained immense popularity because no government can control it. Thus, we got a new kind of currency. Bitcoin and Ethereum are kinds of virtual currency. No central force controls these, and they can be sent from one person to another easily.
This system of exchanging money became popular because:
- No third party is involved
- The processing fees are very low
- The speed of transactions globally is quick
- Cryptocurrency provides a way for doing all this with added security.
What is Blockchain?
The blockchain is the technology behind the transfer of money online. It is a distributed ledger on a peer-to-peer network, public and anonymous.
The blockchain is storage units that keep records. These records can be shared over thousands of computers. If there is a change even in one record, it needs to be accepted by all the systems within the network.
This technology has all the features which are required for a virtual money transaction. It is safe, secure, transparent, and anonymous and not governed by anything. All the transactions regarding cryptocurrencies are stored on the Blockchain.
Blockchain Cryptocurrencies- the difference between the two
1. Assets vs. Technology
Cryptocurrency is an asset and just one application of the Blockchain technology. Whereas Blockchain technology has more to give than just support Bitcoin. It is also used for many other complex assets like properties, luxury products, food products, and cars.
One example of Blockchain tech being used in something other than Cryptocurrency is Everledger. This application uses it to trace the origin place of luxury goods. This helps to minimize scams, document and data tampering.
2. The Blockchain more trustworthy and preferred by banks
When it comes to trust and preference, Blockchain a way ahead of Cryptocurrency. The reason behind this is that Blockchain has a cleaner reputation. Many financial institutions that are well-known like JP Morgan, Goldman Sachs, and Bank of America etc. have backed this.
They have used the Blockchain technology to streamline their transaction process and also fasten it.
3. Blockchain Cryptocurrency- Versatility
Blockchain technology is more versatile with multiple features. This technology is being used in many applications in almost every field. From healthcare to management, every industry is using this tech for developing better functioning apps. While
Cryptocurrency is less versatile and unregulated. This is probably the biggest reasons why many nations avoid using this digital asset.
4. Blockchain and Cryptocurrency- what it holds for the future?
Blockchain technology will transform the economy and the future of the world. As more companies shift to this dynamic technology, positive change is expected. Since the data once entered in this, it can’t be changed or altered, businesses are more inclined to use too. In the future, it will be preferred more because it saves time, is secure and transparent. It has a lot of potential for growth and is a futuristic technology. Whereas
Bitcoin (Cryptocurrency) was developed for the same. But with its growth, businesses are apprehensive to it and its future is a little bleak.
How they work together?
- Blockchain and Cryptocurrency are intertwined, and neither will work without the other.
- We have read the difference between the two, and they are substantial. But it is also true, that they both are dependent on each other for transforming the financial scenario.
- The Blockchain the only platform that can bring Cryptocurrency into play. This lets the user transfer digital money and other valuable data.
- Cryptocurrencies are the tokens that this network uses for transferring value. They are a tool of this technology and serves as a resource. They can also be used to monetize the value of an asset.
- They both together make an ecosystem, where Blockchain is the base and Cryptocurrency a part of it. They both depend on each other for better functioning. Crypto is often needed for the transaction through Blockchain, while this technology is required to store and record the details of most transactions.
While it is great to notice the difference between both Blockchain and Cryptocurrency, it’s also crucial to understand that they need each other to work better.
Blockchain and Cryptocurrency cannot be separated. They need to be used together in every sense, and hopefully once the mist surrounding them disappears they will.