Blockchain 101: Bitcoin VS Blockchain | the bitcoin and blockchain technology explained
While Bitcoin and Blockchain are closely related, they are in no way the same thing. If you want to know more about cryptocurrencies, then read on.
In super-simple terms – Blockchain is the technology and Bitcoin is the initial application of that technology.
What is Blockchain?
Blockchain is an open and distributed ledger that is stored across several computers, thus making it decentralized. In simple language think of Blockchain as a computer file that is used to store data. It is almost impossible to cheat the system, the transactions on Blockchain are very transparent and secure. Decentralization is the most transformative aspect of Blockchain. Since there is no central point, the hackers have no target to aim for. It is made up of three important concepts which are blocks, miners, and nodes.
What is Bitcoin?
Blockchain is the technology that supports Bitcoin. The technology was developed to enable Bitcoin. Bitcoin is a decentralized digital currency. Thus, enabling users to transfer bitcoins with any authoritative party like a bank or government body. Users need a Bitcoin Wallet to send, receive, and store funds. The Wallet can be downloaded on your phone, computer, or any other digital device.
The interesting thing to know about Bitcoins is that they are not stored on any platform. It uses algorithms to protect the public and private key numbers. The public key in Bitcoin is like a bank account number while the private key can be understood as the ATM pin.
Blockchain Vs Bitcoin
∙ Blockchain is the technology platform and Bitcoin and other cryptocurrencies use it for safe
transactions.
∙ Blockchain is a transparent system, whereas bitcoins work on ambiguity.
∙ While Bitcoin is only used to exchange digital currencies Blockchain transfers ownership
rights,
proprietary data, digital assets, and so on.
∙ Blockchain has many more applications beyond Bitcoin.
Let us look at the expansive side of Blockchain. While it may have started with Bitcoin, it took people a long time to figure out other applications of Blockchain. Experts believe that Blockchain’s real potential still remains untapped and it will revolutionize the way we do business today. Let us look at some of the applications of Blockchain beyond Bitcoin:
Smart Contracts – Bitcoin has shown the world that Blockchain is amazing when it comes to digital transactions. Further, Smart Contracts in Blockchain has enabled people to formalize digital relationships. Under Smart Contract, automated payments are released once the contract terms have been met, eliminating any discrepancies or disputes while saving time and effort.
Maintaining a record system – Blockchain is the most ideal solution when it comes to maintaining a secure, transparent, and long-term record of assets. All this is achieved while all parties have uninterrupted access securely.
Supply Chain – Blockchain enables users to track the ownership record all the way to the source for goods.
Insurance Proof – To offer proof-of-insurance information, Nationwide insurance company is thinking to use Blockchain. Thus, assisting insurers, customers, and police officers to verify the coverage promptly and save time on the whole process.
IoT – Blockchain applications are being developed around the Internet of Things. While IoT has many applications, safety and security is a major concern for those applications. Blockchain-infused IoT would allow a higher level of security.
Identity Crisis – Identity theft complaints have dramatically increased as frauds happen from forged documents to hacking personal information. If personal information like birth dates and certificates, social security numbers, and other sensitive data is kept on a decentralized blockchain ledger, there could be a significant fall in identity theft cases.
Thus, it is essential to note that in near future, Blockchain could become a potent tool for conducting fair trade, developing business, democratizing the global economy, and promote a more open and fair culture.
Watch: Blockchain 101 | What Is Blockchain? | STT
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