Blockchain and Cryptocurrency: The Key Differences You Need to Know

Blockchain and Cryptocurrency: The Key Differences You Need to Know

08/01/2020
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blockchain-and-cryptocurrency-the-key-differences-you-need-to-know

The terms cryptocurrency and blockchain are used interchangeably whenever digital assets are listed. Given the technical depth and complexity of this new technology, many terms and concepts surrounding it can often be confusing. Everyone eagerly wants to know whether both blockchain and cryptocurrency are similar or possess some difference. Just as others even, you might be thinking the answer for this could be very simple.

Such two terms are fundamentally different, and most people say that Cryptocurrency is digital money, and Blockchain is the technology that powers it. However, the answer is not that simple as you think. It is good to note the difference between Blockchain and Cryptocurrency and it is important to realize that each one needs to be better at functioning.

In this article, we will look at the differences between these technologies, which are famous as a Cryptocurrency App Development and blockchain app development with the aim of exploring the various different nuances and features of these seemingly interchangeable terms.

Continue reading the article on blockchain and cryptocurrency for a clearer idea.

First of all what is Blockchain and Cryptocurrency?

Blockchain:

The term blockchain is the technology behind the transfer of online assets. It is a distributed public and anonymous ledger on a peer-to-peer network.

The blockchain is a record-keeping storage unit. Thousands of computers will share these documents. If even one record changes, all devices in the network will consent to this change. That is where this technology shines providing clear transparency.

It is a platform that has all the functionalities and qualities virtual money transaction seeks for. It is free, stable, transparent, open, anonymous and unregulated. The Blockchain stores all transactions involved in cryptocurrencies based transaction.

Cryptocurrency:

A cryptocurency  is a purely digital asset whose authoritative root control is preserved by a mechanism in which members implement all rules of the system by their own choice and in which no party has any legal right to force the system to function in a specific manner.

Cryptocurrency system of exchanging money became popular because:

  • There is no third party.
  • There are very low production costs.
  • Transaction pace is fast worldwide.
  • Cryptocurrency provides the added security to do all this.

Blockchain Technology versus Cryptocurrencies with Example

Blockchain technology was previously interchanged with bitcoin and then developed with other virtual currencies to support it. The public record has nevertheless come a long way since then. Much more use found and created in blockchain technology in addition to altcoins. Cryptocurrencies are now only one of several applications for which blockchain can be used.

Let us understand with example:

Imagine that you are in a casino. You enter the house and swap cash with chips. You can use these chips to play in the casino, but they don’t get legal buying power outside the casino.

In this example, a casino chip has considered as a cryptocurrency coins and the casino is the blockchain network that gives participants an ecosystem and allows players to play coins and trade with them.

We hope the above example has given you clear understanding about blockchain and cryptocurrency.

How These Both Technologies Cryptocurrency And Blockchain Technology Work Together?

Blockchain is not an optional technology for cryptocurrency, but a fundamental cryptocurrency feature. Basically, blockchain and cryptocurrency have become a common thing of the past. Nonetheless, they are not similar in nature; blockchain transcends cryptocurrencies if it is one or the other. Not only has the financial sector, blockchain provided multiple solutions that may disrupt various markets in the coming years.

Blockchain was the database on which every bitcoin transaction was stored hence, it became the reason to bring synonymous in these both technologies. The architecture had existed before Bitcoin was created, but it was this innovative and first cryptocurrency, which brought the system to the fore. It’s the first time the transactions had been bundled into blocks of data, and the first way that the system became popular.

Major Similarities between Cryptocurrency & Blockchain

  • Intangible

Both Cryptocurrency & Blockchain are virtual  and intangible.

  • Technology

The newest technological advancements include the blockchains and cryptocurrencies.

  • Interdependence

Cryptocurrencies and block chains are mutually dependent. Blockchains provide the route for transaction data during transfer of cryptocurrencies.

Also Read: How Blockchain Works Through Its Blockchain Consensus Algorithms

Blockchain and Cryptocurrencies: The Difference between the Two Technologies

  • Blockchain Cryptocurrency- Versatility

With several features, Blockchain technology is more scalable. A technology used in almost every area in many applications. Each industry uses this technology to develop better applications from health care to management. While the flexible and non-regulated cryptocurrency is less. This is probably the greatest reason why many countries do not use this digital asset.

  • Value

Cryptocurrencies have a monetary value and can be used as a wealth indicator. Blockchains is not feasible and cannot be used as a measure of wealth.

  • Assets vs. Technology

Cryptocurrency is an asset and only one Blockchain technology application. Whereas Blockchain provide support to bitcoin and has more to give. It is used also for various other diverse items, including homes, luxury goods, food and cars.

Everledger is one example of the use of Blockchain tech in something other than cryptocurrencies. In this procedure, the origin of luxury goods is traced. This eliminates fraud, documents and data manipulation.

  • Use

It is possible to use Cryptocurrencies for payment, savings and asset storage. A blockchain acts as a crypto-monetary transaction-operating vehicle.

  • The Blockchain Preferred And Trusted By Banks

Blockchain is a way ahead of Cryptocurrency when it comes to trust and choice. The explanation is Blockchain’s credibility is cleaner. Many well-known financial institutions such as Goldman Sachs, JP Morgan and Bank of America have sponsored this.

They have used the technology of Blockchain to streamline and improve their transaction process.

  • Similar Nature of Cryptocurrency vs. Block Chain

A blockchain is a decentralized platform that tracks transactions in cryptocurrency. A cryptocurrency is a virtual resource in a network of transactions.

  • what these technologies holds for the for upcoming days?

Blockchain technology will change the world’s economy and future. More businesses are expected to move to this disruptive technology. As the data cannot be altered or updated, companies are also more likely to use it once entered. The preferential solution in the future is more time saving, secure and clear. It has a lot of growth potential and is a forward-looking technology.

While Bitcoin a kind of cryptocurrency that has been developed for the same. However, companies are afraid of it because of its growth and its future is a little dim.

  • Mobility

It is possible to transfer cryptocurrencies such as Bitcoins from one account to another but not possible with Blockchains.

Conclusion

Blockchain and cryptocurrency are distinct but often-confused terms. Blockchain is a technology behind which cryptocurrencies operate as a fundamental infrastructure, while cryptocurrencies represent value that can be transported from one party to another.

If you are curious to know how you can enhance your business using Blockchain Technology then hire Blockchain Consultants from Fusion Informatics and our expert blockchain consultant will get in touch with you within 24 hours.

As a Top Cryptocurrency App Development Company in Bangalore, Dubai and San Francisco, our team is armed with hands-on experience and applied knowledge of developing crypto apps, blockchain app development and decentralized ethereum apps, smart contracts and more.

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