Blockchain vs. Cryptocurrency

Introduction

It is hard not to have heard about blockchain and cryptocurrency given the recent crypto bubble, which immediately made numerous bitcoin investors millionaires. However, blockchain and bitcoin were once interchangeable when there was just one widely used cryptocurrency.

When several cryptocurrency varieties entered the market on a global scale, the term "blockchain" had to take on a new definition. Today, "blockchain" refers to a ledger system that creates a chain of exclusive blocks. Different information about the transactions is contained in the various blocks. On the other hand, the term "cryptocurrency" describes the tokens that are traded using blockchain technology. These tokens can be traded, purchased, invested in, micro-tipped, and used to make payments. They also have a monetary value.

The ideas of cryptocurrencies and blockchain are closely related. It gets harder to distinguish between cryptocurrencies and blockchain technology as they operate using the same technology.

Blockchain technology stores information in various ledgers called blockchains to save data and prevent hacking. By spreading activities throughout a worldwide network of computers, this method enables all currencies to trade freely on all digital platforms, operating independently of any central government and lowering the risk of hacking.

Cryptocurrency is a paperless digital currency, but the blockchain is a technology that enables digital platforms. While you can use blockchain technology to transport anything from information to property rights, cryptocurrency platforms allow users to send money between users.

Difference Between Blockchain and Cryptocurrency in Tabular Form

Basis of Comparison	Blockchain	Cryptocurrency
Nature	A technology that records the transaction	The tool used in virtual exchange
Use	Records transaction	Make a payment, investment, storage of wealth
Value	Have monetary value	Have no monetary value
Mobility	Can be transferred	It cannot be transferred

What is Blockchain?

A blockchain functions as a digital database for the storage of data. Maintaining a safe and decentralised record of transactions in cryptocurrency systems like Bitcoin is the most well-known application of blockchain technology. Blockchain innovation fosters confidence without the necessity for a reliable third party by ensuring the fidelity and security of a data record.

Data is often organized very differently from how it is organized on a blockchain. In a blockchain, data, including data sets, are accumulated in units called blocks. When a block is filled, it is sealed and linked to the block before it to form the data chain known as the blockchain. Blocks have predefined storage capacities. When the chain is complete, a new block is created from each piece of information that follows the newly added block and is then added to the chain.

As its name suggests, a blockchain arranges its data into pieces (blocks) that are strung together, whereas a database typically organizes its data into tables. When used decentralized, this data structure creates an irreversible chronology of data by design. When a block is completed, it is irrevocably sealed and added to the timeline. When a block is added to the chain, it receives a precise timestamp.

Is Blockchain Safe?

Decentralized security and trust are made possible by blockchain technology in several ways. To start, new blocks are always chronologically and linearly stored. In other words, they are constantly added to the blockchain's "end." Once a block has been added to the blockchain, it is very difficult to change its contents unless most of the network consents. This is because each block contains its own hash, the hash of the block before it, and the previously mentioned date.

Imagine a hacker who also manages a node on a blockchain network and wants to change a blockchain and take everyone else's cryptocurrency. If they changed their copy, it wouldn't match the copies made by everyone else. When everyone compares their copies to one another, they will notice that this one copy stands out, and the hacker's version of the chain will be rejected as fraudulent.

For such a hack to be successful, the hacker would need to simultaneously possess and change at least 51 percent of the blockchain copies, making their modified copy the majority copy and, thus, the chain that has been agreed upon. The requirement to rewrite every block because their timestamps and hash codes had changed would make such an attack extremely expensive and resource-intensive.

Considering the expenditures required, it would probably be impossible to pull off such a feat given the size of many cryptocurrency networks and how quickly they grow. Therefore, this would probably be ineffective in addition to being highly expensive. As network participants would observe such significant changes to the blockchain, doing such a thing would not go unnoticed. The network's users would then abruptly switch to an unaffected chain version. As a result, the token version that was attacked would lose value, rendering the attack useless because the malicious party would be in control of a worthless asset. The same would happen if the malicious party targeted Bitcoin's most recent fork.

Innovative Applications of Blockchain

There are many innovative applications for blockchain technology, and you don't need to look very far to find them. Applications for the reliable, secure data storage, authentication, and encryption capabilities of blockchain technology are emerging across a variety of sectors, including music, real estate, healthcare, and government. 8 Seven more uses for blockchain technology are listed below; some of which are highlighted by cryptocurrencies:

Finance- The storage and movement of money from one entity to another is one of the key services provided by the financial sector. This calls for a reliable intermediary, such as a bank. By decentralizing transactions, blockchain effectively eliminates the necessity for such intermediaries. Blockchain is assisting in resolving several issues relating to the interoperability of various financial systems worldwide by removing the means of the transaction from siloed, closed networks. 9

The openness and security of payments made via blockchain technology are also improved by the ability to track every transaction. This is advantageous to the parties to a transaction and the appropriate regulators.

Smart Contracts- Smart contracts are self-executing algorithms that enable direct negotiations between the seller and the buyer. They are started automatically when certain criteria are met. Transactions on a blockchain network are traceable, transparent, and irrevocable because they are carried out there. 11 This kind of automation can sharply increase productivity while reducing business expenses. Said, it facilitates the transparent, conflict-free exchange of property, shares, legal papers, or anything else of value while saving you money by cutting out the intermediaries.

Cyber Security- Because the network of nodes (the various computers on which the shared database is stored and which validate transactions) can cross-reference to locate the source of a disputed change, data stored on the blockchain is rendered tamper-proof. As a result, the technology has several potential cybersecurity applications. Storing data across a network of devices lowers the chance that a hacker will target a single point of weakness. Decentralizing control of Internet of Things devices and edge devices can increase their security against assaults and serve as entry points into the main networks of businesses or service providers.

Health Record- A decentralized, reliable blockchain system has several possibilities for storing medical records. For example, personal health records (PHR) are generally maintained by people and gather information from devices, clinics, medical institutions, and pharmacies. In addition, doctors maintain electronic health records (EHR) and digital archives of patients' medical histories.

Patients who maintain PHRs may occasionally question the accuracy of the data. They would be secure, traceable, unalterable, and auditable if stored on blockchains.

NFT- The tokens on blockchains that are more frequently referred to as "NFTs" differ from cryptocurrencies because they are one-of-a-kind digital assets. 16 NFTs can technically represent ownership of anything. However, they are primarily used to purchase and exchange digital artwork. A lot of the time, this digital art is already created and publicly accessible online for anybody to view, acquire, or download. Ownership of the art is what an NFT grants. Imagine the distinction between having an original painting and a print of it.

What is Cryptocurrency?

A cryptocurrency is known as digital or virtual money that employs encryption to prevent fraud or double-spending. Many cryptocurrency decentralized networks are built on blockchain technology, a distributed ledger enforced by a dispersed network of computers. The fact that cryptocurrencies are often not issued by any central authority makes them potentially impervious to intervention from or manipulation by governments.

Digital or virtual currencies supported by cryptography technologies are known as cryptocurrencies. Without outside intermediaries, they make it possible to make safe online payments. The term "crypto" refers to numerous cryptographic methods, such as hashing, public-private key pairings, and elliptical curve encryption, protecting these entries.

It is possible to mine cryptocurrencies or buy them via exchanges. However, not all e-commerce websites enable cryptocurrency transactions. In reality, hardly any retail transactions are conducted using cryptocurrencies, even well-known ones like Bitcoin. However, the exponential growth in the value of cryptocurrencies has increased their acceptance as trade commodities. They are utilized for cross-border transactions to a limited extent.

Advantages

In terms of money, cryptocurrencies represent a brand-new, decentralized paradigm. In this system, transactions between two parties are governed by trust rather than centralized intermediaries like banks and financial institutions. In light of this, a system based on cryptocurrency eliminates the chance of a single point of failure, such as a major bank, causing a chain reaction of crises to occur all over the world, similar to the one that was brought on in 2008 when American institutions failed.
With the use of a trusted third party like a bank or credit card provider eliminated, the direct movement of money between two parties is made easier by cryptocurrencies. Public and private keys, as well as various forms of reward, are used to secure these decentralized transfers.
Cryptocurrency transfers between two transacting parties are quicker than traditional money transfers since they don't employ third-party intermediaries. An excellent illustration of such decentralized transfers is flash loans in decentralized finance. These loans can be executed instantly and are used in trading because they are done without supporting collateral.
Investments in cryptocurrencies can be profitable. The value of cryptocurrency markets has increased dramatically over the last ten years, peaking at almost $2 trillion at one point.
One of the most well-known use cases for cryptocurrencies is being tested in the remittance industry. At the moment, cryptocurrencies like Bitcoin act as intermediary currencies to speed up international money transfers. So, fiat money is exchanged for Bitcoin (or another cryptocurrency), sent across international borders, and then exchanged for the destination fiat currency. This technique simplifies and lowers the cost of the money transfer process.

Main Difference Between Blockchain and Cryptocurrencies in Points

Blockchain and cryptocurrency are both ground-breaking developments in the vast field of technology.
Cryptocurrency and blockchain have some key distinctions. Blockchain is only a type of technology with no monetary value, whereas cryptocurrency has a monetary value and can be used to buy products and services.
The main distinction between blockchain and cryptocurrency is thus this. Blockchain is incredibly adaptable and has many use cases. For example, banking, retail, and healthcare transactions may all be tracked using blockchain technology. However, the sole function of cryptocurrencies is to be used to pay for products and services.
The transparency of blockchain and cryptocurrencies is another distinction.
Blockchain is extremely transparent since various nodes can see and verify transactions because it is dispersed throughout a network. However, because the owner of a bitcoin transaction cannot be identified, cryptocurrencies provide anonymity.
Due to its many advantages, including the ability to record transactions and store data with the highest level of security and without intermediaries, blockchain technology is utilized in many industries, including banking, logistics, and supply chain management.
The primary uses of cryptocurrencies are as mediums of exchange and payment for goods.
Blockchain technology is fundamentally decentralized, kept globally across databases rather than in a single location or data center. On the other hand, cryptocurrency can be used for trading and exchanging money through desktop or mobile wallets from any location.

Conclusion

Both cryptocurrencies and blockchains are recent technological innovations. It is composed of building blocks that connect to create a chain. There have already been innumerable blocks created. Digital currencies like Bitcoin and Ethereum are known as cryptocurrencies and are utilized as virtual transaction tools. Cryptography, an art of coding, is how cryptocurrencies are created. The currencies can be used for various purposes, such as payments, investments for speculative investors, and wealth storage. Cryptocurrencies can be traded for real money and have monetary worth. Until now, speculation has been the main factor in determining their worth. Cryptocurrencies are distinct from all other forms of money because they are created by mining with specialized software and equipment instead of being printed by the government.

References

Introduction
Blockchain vs. Cryptocurrency
Difference Between Blockchain and Cryptocurrency in Tabular Form
What is Blockchain?
What is Cryptocurrency?
Main Difference Between Blockchain and Cryptocurrencies in Points
Conclusion
References

Difference Between Blockchain and Cryptocurrency

Introduction