The key difference between blockchain and cryptocurrency is that cryptocurrency has monetary value and can be used to purchase goods and services, whereas blockchain is just a form of technology holding no monetary value.
“Blockchain” and “Cryptocurrency” are words that frequently pop up in conversations. Both blockchain and cryptocurrencies are innovative advancements in the immense world of technology. But what is a blockchain? What is a cryptocurrency? In brief, a blockchain is a form of distributed ledger technology used to store records of transactions. Cryptocurrency, on the other hand, is a form of currency that exists digitally and can be used to perform transactions.
CONTENTS
1. Overview and Key Difference
2. What is Blockchain
3. What is Cryptocurrency
4. Blockchain vs Cryptocurrency in Tabular Form
5. Summary – Blockchain vs Cryptocurrency
What is Blockchain?
Blockchain is a distributed ledger that can store data of any kind. But what makes blockchain different to a basic excel sheet is that blockchain is completely decentralised. This means copies of the blockchain exist in multiple different computers around the world instead of in one central location. These multiple different computers spread out across a worldwide network is called a node.
Figure 01: Blockchain
Blocks containing various forms of data are conjoined together to form a chain of blocks, hence the name blockchain. Once a new block of data is added to the chain, the new version of the blockchain is updated throughout all the nodes on the network. A majority of the nodes must verify and confirm new transactions for them to be added to the blockchain. This is what makes a blockchain highly secure.
What is Cryptocurrency?
A cryptocurrency is a form of currency that exists digitally or in a virtual environment. Just like regular currency, which is referred to as fiat, cryptocurrencies can be exchanged for goods and services. However, the severe fluctuations in prices have hindered an extensive worldwide adoption of cryptocurrencies.
Figure 02: Cryptocurrency
What makes cryptocurrencies so special is that they are based on Blockchain networks, meaning they are not governed or authorised by one central figure such as the government. Instead, it is authorised by multiple nodes on the blockchain network, ensuring that cryptocurrencies are immune to manipulation.
What is the Difference Between Blockchain and Cryptocurrency?
Both blockchain and cryptocurrencies are innovative advancements in the immense world of technology. There are several differences between blockchain and cryptocurrency. Cryptocurrency has monetary value and can be used to purchase goods and services, whereas blockchain is just a form of technology holding no monetary value. Thus, this is the key difference between blockchain and cryptocurrency. Blockchain has several use cases and is very versatile. Blockchain technology can be used to record transactions in banking, retail, and healthcare. But the only purpose of cryptocurrencies is to purchase goods and services.
Another difference between blockchain and cryptocurrency is their transparency. As blockchain is distributed amongst a network, it is highly transparent as multiple nodes can view and verify transactions. On the other hand, cryptocurrencies offer anonymity as you cannot distinguish the owner of a cryptocurrency transaction.
Below is a summary of the difference between blockchain and cryptocurrency in tabular form for side by side comparison.
Summary – Blockchain vs Cryptocurrency
In conclusion, there are several differences between cryptocurrencies and blockchain as the purpose of these two technologies are completely different. The key difference between blockchain and cryptocurrency is that blockchain is a type of distributed ledger technology that is used to store transaction records, while cryptocurrency is a type of digital currency that may be used to make transactions.
Reference:
1. “Blockchain, block, chain, technology” (CC0) via Pixabay
2. “Cryptocurrency logos” By voytek pavlik – via GoodFreePhotos (CC0) via Commons Wikimedia
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