Blockchain Vs Bitcoin
Added: (Fri Jan 04 2019)
Pressbox (Press Release) -
Blockchain and Bitcoin are two such words which are often used conversely. There is a misconception that both are the same technologies. Of course they are very much related but they are not the same, they are different from each other. Blockchain’s very first application was Bitcoin. Bitcoin is nothing but a cryptocurrency. In fact, bitcoin is powered by blockchain. The term cryptocurrency is a kind of digital currency. We can use this cryptocurrency as a digital money. There are many cryptocurrencies available such as Litecoin, Monero, Ether, ZCash etc., which are also very popular, but ‘Bitcoin’ is the most popular one. When you do some deep study of Bitcoin you will come to know that the word Bitcoin has several elucidations. The word bitcoin starting with a small letter ‘b’ represents token or the digital currency. Whereas, the word Bitcoin with capital letter ‘B’ represents blockchain network that maintains a ledger for the digital currency ‘bitcoin’.
Bitcoin allows you to transfer assets all around the world using Blockchain technology. We can also call it as a decentralized electronic payment system. Bitcoin was first discovered by Satoshi Nakamoto. It is a pseudo name given to the inventor of Bitcoin. His identity is still a mystery. Satoshi Nakamoto eliminated the problem of “double spending” for digital currencies. It may interest you to know that before bitcoin there were many attempts made to develop a digital currency system which is prone to all kinds of attacks but they all failed miserably. So Bitcoin came to the rescue here.
Bitcoin is a distributed Ledger management system which is unambiguous and secure. The main purpose behind invention of Bitcoin was to completely discard the involvement of third party intermediaries like governments and brokers. Lets take an e.g., bank charge us for all the services it provides. Whenever you perform any fund transfer they charge you some percentage of amount. It seems a very minor amount to you, but if we imagine a broader scenario where, a very large amount or combined amount of certain number of transactions is considered then in that case the amount charged is very huge. Hence there was a necessity to discard this third party involvement.
Satoshi Nakamoto released a whitepaper in 2008 in which he stated the issue of double spending and how digital financial transactions were still depending on third parties for it. He created a unique solution in order to prevent double spending. That solution is known as Blockchain Technology. Blockchain Technology is nothing but a global public ledger which tracks each and every transaction. All transactions has to be individually approved by miners. If miners successfully approves those transactions, then only those record will get added to blockchain. For performing successful transaction validation, miners get rewarded a certain amount of Bitcoin. In this manner, we do not need any third party to keep track for double spending. Every transaction is verified by miners to make sure that no one is spending Bitcoin more than once. If such attempt is made by using same bitcoin input in same block, then those two transactions will not get confirmed on the network. Hence double spending gets completely eliminated.
Blockchain is open, verifiable yet secure technology. Anyone on the network can look over to any transaction up to the genesis block. But if any attempt to change the block is encountered, then the hash value will change. And subsequently the verification fails. Blockchain trade currencies like bitcoin and is also used for other purposes like maintaining voting records, asset management, medical data, government data and so on. Blockchain provides security because, the transaction done is not stored at one site. If done so there is a high risk of single point of failure. Instead, the transaction is placed across different sites because of which single point of failure is avoided and data remains safe. The verification of data is performed on regular basis on each node. Blockchain is durable, robust and transparent.
Coming to the conclusion, Bitcoin is a cryptocurrency which is necessary to transact on a blockchain. Bitcoin was the very first cryptocurrency used by blockchain. But since then many other cryptocurrencies were also invented. Cryptocurrency and Blockchain go hand in hand. They aim in transforming our digital future.