Blockchain and Cryptocurrency are both related to one another but are very different as well. These both terms we can guess is related to technology as well as money. Both Blockchain and Cryptocurrency can be said to work side by side.
Blockchain, as we can understand by the name, is a block of chains. This is a technology in which transactions are stored, or we can say data of that transactions are stored. This can be said as the synonym of the traditional banking system.
Cryptocurrency, on the other hand, can be said as the currency of this new banking system. There are different kinds of cryptocurrency. For example, Bitcoin is one of the Cryptocurrency which has its own system of transactions, called Blockchain.
Blockchain vs Cryptocurrency
The main difference between Blockchain and Cryptocurrency is that one can be assumed as a banking system while the other is the currency of that banking system. Both the function of these terms walk side by side and are needed by each other but is not a synonym of each other.
Blockchain is kind of a storehouse of Cryptocurrency, which also keeps the record of that cryptocurrency. This is a system of accounting that help cryptocurrencies like Bitcoin to work. Blockchain is the chain of the network which is spread among the users. This technology is created on open source code.
Cryptocurrency is a kind of currency that is used as a means of exchange. As we can understand by the name itself, it is a currency that is in the form of cryptography. These currencies are very strongly protected, rotated and secured in case of financial transactions by this technology of cryptography.
Comparison Table Between Blockchain and Cryptocurrency
| Parameters of Comparison | Blockchain | Cryptocurrency |
| Work | It helps keep the records of the transaction | It is used as a currency for transaction |
| Use | One of the uses of Blockchain is that it is used by Cryptocurrencies as a system to maintain all its transactions | Cryptocurrencies are used as the currencies of the transactions one of such cryptocurrencies is Bitcoin |
| Effectiveness | Blockchain has eliminated the system of the Traditional Banking system and has created more secure transactions | These are currencies that are coded and secured with the help of Cryptography |
| Cybersecurity | Blockchain due to highly advanced Cryptography makes the transaction safer | Cryptocurrency are a very digitalized currency that is also protected by Cryptography |
| System | System: No modification once the details of the transaction are done making a perfect record | This is based on the IOU |
What is Blockchain?
Blockchain verifies the transactions of cryptocurrencies also record and maintain them in the network or system. The blockchain contains blocks of records of verified transactions in serial or chronological order. Each area of these blocks contain piles of codes and codes which specifies the details of these verified transactions. Each block has comprised many numbers of verified transactions.
Blockchain is a very reliable system for recording transactions because of the link between the blocks. The more backdated the transaction is, is more difficult it is for the record to be either removed or changed. These are mainly permanent records.
Blockchain has blocks that further can be broken into different hashes and is always put chronologically. As the order of the chain of blocks is not disturbed or changed, it is easy to find a particular hash.
Blockchain also helps Cryptocurrency to work or do a transaction. This also keeps all the records of the transaction. Blockchain validators are those who are the users of this Blockchain who always verify transactions and makes them valid to make them a legitimate record. It also gives a few days before making any transaction legitimate.
What is Cryptocurrency?
Cryptocurrency is different from what we traditionally know as currency. A traditional currency always works under central authorities, which are mainly the government of countries. On the other hand, this is a kind of currency that is decentralized and are not under any kind of central authority.
The users or ‘miner’ use Blockchain technology and verify transactions which helps in the process of working the central banking system of these currencies. This participation of miners helps the whole system work, and in return, they are awarded decreases in transaction fees as well.
This currency doesn’t have any particular or significant materialistic backing system like traditional currencies, which are backed up by gold. This makes it difficult to decide the values of Cryptocurrencies. For example, a bitcoin’s value is decided by demand and supply.
This is a very highly decentralized and digital technology that uses Blockchain to form a system in order to operate. These are also known as virtual or digital currencies. Cryptography is used for security, and no one own which makes it immune from the control of the authority. The first Cryptocurrency was Bitcoin, but now there are many other Cryptocurrencies.
Main Differences Between Blockchain and Cryptocurrency
- Blockchain is one of the foundation factors of Cryptocurrency and is not the same thing.
- Blockchain acts as a system or network which reserves the information of the transaction. The currency which is used in these transactions is known as Cryptocurrencies.
- Blockchains are first used by Cryptocurrencies. These are not synonyms and works hand in hand for a digit and decentralized transaction system.
- Blockchain and Cryptocurrency both are decentralized technology under no authority, but one is a banking system while the other is the currency of that banking system.
- Blockchain is the piles of transaction details, while on the other hand, Cryptocurrencies are what is used as a means of exchange that is recorded.
- The first users of Blockchain were Cryptocurrencies, while the first Cryptocurrency was Bitcoin.
Conclusion
Blockchain and Cryptocurrencies are very often taken as the same thing or synonyms of each other, but they are very different things. Blockchain and Cryptocurrencies are both digital technologies that have formed a new way of transaction. These are very different from our old and traditional transaction system, which also make it hard to understand.
But as the world is going more and more digital, the transactions with the help of Blockchain and Cryptocurrency it is at the best level. Blockchain and Cryptocurrency work side by side to make this decentralized and digital system of transaction work.
References
- https://www.sciencedirect.com/science/article/pii/S0007681319301156
- https://brie.berkeley.edu/sites/default/files/juri-mattila-.pdf
- https://jai.pm-research.com/content/23/2/141.short
- https://ieeexplore.ieee.org/abstract/document/8760539/