For a better understanding of crypto, one must first understand Blockchain Vs Cryptocurrency. In the mid-1990s, when the Internet was starting to catch on, many early adopters only saw one use for it. For instance, some people read on the Internet and think of it as a source of information. Others used the Internet to send emails and talk to people in other ways.
This continued until some businesses started using the Internet to run their operations. People worldwide realized that the Internet is a core technology that can be used in many ways. At the same point, Blockchain technology is now. People think of Bitcoin whenever they hear the word “blockchain.”
But to say that Bitcoin is a Blockchain is the same as saying that email or social media are the internet. Bitcoin is just one way that Blockchain technology is put to use. We can’t say this enough: Blockchain is so much more than just Cryptocurrency. So, we chose to talk about these differences.
What is a Blockchain?
For a better understanding of Blockchain Vs Cryptocurrency, let’s examine each technology separately. Blockchain is a recent kind of database. A database is a gathering of data that is put together to make it easy to find and use. You can put data into tables, rows, columns, and other structures. And every time we do something on the Internet, data is made.
You can do it even if it’s as easy as commenting on a post or as hard as uploading a video. A vast amount of information is made. This requires good data management, which is what databases are for. The only problem with these databases is that they are kept on a single server. This server is run and managed by one person or group, which causes the following problems:
Single Failure Point
Since data is only stored in one place, there is a chance that the system will fail. If something goes wrong at these spots, the information could be lost. Even though Amazon and Google use the best technology available to ensure this doesn’t happen, there have been times when networks like Facebook have been down for more than 12 hours.
- These businesses also have backup servers to ensure that data isn’t completely lost, but it costs a lot to run such a system.
- Imagine that you can’t look up “what happened to Google” on Google. It’s unlikely, but not unthinkable.
Blockchain Vs Cryptocurrency: Power Differences
Having one person or group in a load of information is never a good idea. To put that in perspective, Facebook knows more about us than our countries’ governments do right now. For example, when Twitter and Facebook banned Donald Trump from their sites, they showed off their power.
This shows that the owners of these platforms can still pull the plug. This is one of the main reasons why the EU came up with a detailed set of laws called GDPR, which tries to limit this power imbalance.
Blockchain Vs Cryptocurrency: Censorship
Since a single authority runs these centralized servers, there is nothing that can stop them from doing their own thing. For example, Facebook could run a campaign to improve its image, and all 2.9 billion people who use the site daily would see it immediately.
They could also block all the news trying to make Facebook look bad. This is just an illustration. If we tried to replace Facebook with anything else, we might have a big problem. This could make people very divided.
How does blockchain solves these problems?
Blockchain tries to make the database more open to everyone. Each person who is part of a Blockchain network can check the transactions. This information is also in the public domain, so anyone can look it up and check it themselves.
The information on these blockchains is stored in the form of blocks stacked on top of each other. Each person has their own copy of this Blockchain at any given time.
So, if someone tried to trick the system by changing the information in a block, their copy would be different from the others and thrown out of the Blockchain. Because this technology is run by multiple people (called “nodes”) at the same time instead of just one, it is a decentralized form of database that solves the following problems:
No Single Point of Fault
This time, the show is run by a group of people instead of one person in charge. So, even if a few nodes fail, it doesn’t have much of an effect on the Blockchain as a whole. We have to keep going. This differs from centralized servers, where a problem at one location can bring down the whole system.
Equal Sharing of Power
When it comes to how people think and act, there is a rule of thumb about power. When you ask a group of people who should be in charge, they always say, I should be in order! If you take that choice out of the equation, the next best alternative is, “No one should be in charge.”
Here, the second choice is what Blockchain technology is based on. There is an equal allocation of power because no one person or group can change the network at will.
Again, Blockchains are the best kind of peer-to-peer technology. You can’t force or stop people from telling specific stories to help yourself. Even though this could be a double-edged sword, it’s worth a try. If you require to learn more about Blockchain technology, here is a guide for people who don’t know much about it.
What is Cryptocurrency?
Cryptocurrency is the virtual or digital currency protected by cryptography and built on top of Blockchain technology. This makes it impossible to hack Cryptocurrency and makes it impossible to spend double. Think about it this way: unlike the real world, the Internet is full of resources. One could copy a piece of text, download an image, or republish a video. They really can’t be stopped by anything.
So, the idea of digital money does seem rather attractive, but what would happen if someone made multiple copies of that money? It won’t make sense. This is where Blockchain technology comes in. It gives people the power to ensure digital money doesn’t go anywhere.
All of the transactions in the system are legal and have been checked out by the people. This led to the origination of Bitcoin, the first digital currency that cannot be stolen and has a limited supply.
Even though Bitcoin solved the problem of centralization, it couldn’t be used for anything else. Vitalik Buterin had the idea for Ethereum in 2012, so that’s how we know it was his idea.
Genesis was supposed to use the technology behind Blockchain to make more ways to use digital money. This was possible when intelligent contracts could be written and run on the Ethereum Blockchain.
At the moment, Ethereum is the Blockchain that most people use to run decentralized applications, or dApps, on top of it. But there were some worries about how Ethereum could grow. Because of this, there are now many solutions on the market for these problems. Each Blockchain has its token and offers different ways to get a market share. As a result, knowledge of Blockchain Vs Cryptocurrency is essential
Are Blockchain and cryptocurrencies the same?
Our discussion on Blockchain vs Cryptocurrency showed that Cryptocurrency is an integral part of Blockchain technology. At the moment, the vast excitement about cryptocurrencies often makes it hard to see the enormous potential of Blockchain technology. And the way this space is called could be the best example. Most people call it the crypto space instead of the Blockchain industry.
What Happens Next?
Now that you know the distinction between the Blockchain Vs Cryptocurrency of this decade go in front and flaunt. Take charge of those dinner table chats. Who knows? You could as well get paid for it. Don’t know how? Here is a Nas Academy Web3 Community to help you get started.