Introduction
The words blockchain and cryptocurrency have been trending for a long time now. These two terms are often used together, and many people often confuse it thinking they mean the same thing. However, these two are different technologies with their functions, but their functions are intertwined in a very close association. You can understand the whole process by yourself by going on to websites like bitcoin buyer.
The best way to understand the differences between the two is to gather hands-on experience from legitimate Crypto trading websites like the one mentioned above. This way, you can gather knowledge about this trending thing in the tech world and open an avenue for yourself to profit from the e-coins.
Understanding Blockchain
To understand the difference between the two terms, we need to start with blockchain. Blockchain can be defined as a digitalized decentralized ledger on which every record of transactions between two parties is recorded continuously without any error. This means that any and every peer to peer transaction across any network can be conducted with the help of this technology.
Furthermore, with blockchain, any user can directly send data without requiring a third party to act as a clearance authority.
You can very well understand this has a vast scope. The application of blockchain technology can be a boon to many industries to even politics. Fund transfers are just one of the many applications of this up-and-coming technology. This is when the connection between blockchain and cryptocurrency comes.
Blockchain in The Limelight
If you look at the history of blockchain, we can say that basking in the limelight is a very recent phenomenon. After all, this technology was even present way back around the early 1990s. This may seem shocking to many, including Crypto enthusiasts. After all, it is the advent of the flagship cryptocurrency, Bitcoins, by the enigmatic and elusive Nakamoto.
Some important Blockchain Concepts to Grasp
Before we move on to cryptocurrencies, some essential concepts related to blockchain technology need to be understood. It is these concepts that come in understanding cryptocurrencies as well.
The first one is blocks. The fundamental aspect of blockchain technology joins together to form a chain that contains all the necessary information about a transaction made for this technology. Every single block will have its unique nonce and hash. This information will be stored linearly in a perfect chronological manner. As the length of the chain increases, the opportunity to manipulate the data contained within its blocks becomes more difficult.
The second concept to understand is nodes. Without nodes, a decentralized system couldn’t have been a possibility. Nodes create the ubiquitous and help in the percolation of this technology to all. Nobody can privately own a blockchain helping in maintaining its integrity. Even this is how the high privacy assured by blockchain technology can be achieved.
Cryptocurrency: the Crown Jewel of Blockchain Technology
Now we have finally come to cryptocurrencies. It is the most popular application of blockchain technology. The popularity of Bitcoins has popularized this much older technology. Currently, the thousands of different cryptocurrencies all rely on blockchain to secure and anonymously make transactions.
As the name suggests, cryptocurrencies are nothing but electronic money. Depending upon the kind of electronic money you are dealing with, its characteristics will change. Of course, the most popular one is the first cryptocurrency, Bitcoin, which put blockchain on the map.
With this basic understanding, you will now find it very clear when discussions about cryptocurrencies and blockchain are made in front of you. Blockchain is nothing but technology, and transferring cryptocurrencies is just one of its applications, so we can understand why these two are so closely intertwined.
Conclusion
However, blockchain has much more to give. The increasing popularity of this technology in industries like health, finance, banking, insurance, etc., is speaking volumes. The popularity of cryptocurrencies is also high. Therefore, we can understand that this bus around two technologies will not die out any time soon. It will be more profitable to learn more about them and implement them in your life to make it better.
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