Have you come across words like cryptocurrency and blockchain and wondered if they are the same? Well, they are not! Cryptocurrency refers to a digital currency, while blockchain is a digital database that stores all the data related to cryptocurrency transactions. Cryptocurrency is available on crypto platforms like Coingate and is protected from hacking by the Blockchain database.
Wish to know more about these two terms? Then read on as we explore cryptocurrency and blockchain concepts and discuss how they are different. Let’s get started!
What Does Blockchain Mean?
Blockchains are cryptographically secure distributed ledgers containing an astounding amount of data related to various transactions.
Rather than being stored on a single centralized server, the data is replicated over hundreds of computers worldwide, allowing each machine to access the database.
Any cryptocurrency transaction is recorded in “blocks,” which consider new block data-collecting vehicles. These blockchains have several elements like hash codes, miners, nodes, and others. Blockchain technology has become so popular now that by 2024 it is estimated to collect an astonishing revenue of $20 billion.
There’s another aspect of blockchains which has developed a whole new revolution of the internet called Web 3.0. Look at our extensive blog about Web 3.0 to understand why it’s taking over the internet.
What Does Cryptocurrency Mean?
A cryptocurrency is a digital store of value used primarily to purchase and sell products, services, and real estate. Bitcoin and litecoin are two famous examples of cryptocurrency. These digital currencies are not in the control of any centralized authority and are protected against hacking, altering, or cheating, and the network’s governance is left to the participants. Cryptocurrency uses the terms coins and tokens as their recognized currency. It was once looked at with suspicion; cryptocurrencies like Bitcoin are now estimated at $1072.21 billion and are still growing.
Now that we have a better idea about these concepts, let’s see how they are similar.
How Are They Similar To Each Other?
- Blockchain and cryptocurrency are both technological advancements. The technology that powers cryptocurrencies is known as a blockchain.
- Both these products are intangible. Unlike the US dollar or the Indian rupee, cryptocurrencies are ethereal digital tokens that cannot be physically owned. Blockchains, which are used to store cryptocurrencies, also do not have a single physical location or data center.
- Blockchain was established to keep track of the world’s first cryptocurrency, bitcoin, transactions. However, it is now used by other major cryptocurrencies too to record transactions.
This is all blockchains and cryptocurrencies have in common. Now let’s discuss their differences.
How Are They Different From Each Other?
- Cryptocurrencies work anonymously, whereas blockchain is a visible method.
- Blockchain has a broader application than cryptocurrency, which only deals with digital currency exchange. Blockchain can record transactions in the retail, supply chain, healthcare, and banking industries. It can also send confidential information, digital assets, and rights, among other things.
On the other hand, Cryptocurrency is a sort of digital money that can only be used to buy and sell goods and services and invest.
- All cryptocurrencies have a monetary value. Blockchain technology, however, has no economic value.
- Blockchain is exceptionally transparent because it is a public ledger. A blockchain network is open to everyone who wants to look at the data it contains. On the other side, cryptocurrencies allow anonymity. As a result, while anybody may see a bitcoin transaction’s source and destination, no one can know who is behind it.
- Blockchain technology is entirely decentralized and is distributed around the globe. None of a blockchain’s records are held in a single location and distributed over a network of computers. On the other hand, even though cryptocurrencies are housed in blockchains, they can be accessed through mobile wallets. You can buy and sell cryptocurrency with anyone who accepts bitcoins if both parties have a bitcoin wallet.
Now that you have a clearer idea about cryptocurrency and blockchain, how they are similar, and their differences, let us discuss their relationship.
Relationship Between Cryptocurrency And Blockchain
The link between cryptocurrency and blockchain is quite essential to the safety of their users. All separate systems documenting and authenticating the trade must recognize that it is accurate before adding a new block to the blockchain. This delivers an unprecedented level of safety and protection. No single computer can alter the chain’s history. The current power placed on central banks and other financial institutions to keep thorough records will eventually be replaced by a general agreement paradigm like blockchain.
Thus we can conclude that blockchain and cryptocurrency are related to one another but are entirely different concepts. Blockchain assures the safety and security of cryptocurrency transactions so that you don’t have to worry about your data or currency getting leaked! So go onto crypto platforms and start trading!