What is the Difference between Bitcoin and Blockchain?
Have you been using the terms Bitcoin and blockchain interchangeably like many others? If so, you need to know that they are definitely not the one and the same thing, although they are closely related. Blockchain is really a distributed ledger for storing information; it contains data from many computers and is decentralized. It is this decentralized nature that makes blockchain a disruptive technology and the basis for cryptocurrency operations. And this is where Bitcoin comes in. Bitcoin is founded on the blockchain technology and is the first successfully cryptocurrency offering secure, borderless, transparent monetary transactions. Without the blockchain technology, you cannot have the Bitcoin.
The Bitcoin is a digital, decentralized peer-to-peer currency that allows users to transfer Bitcoins anonymously without supervision by any third party like a bank or financial institution. Other crypto coins have also been supported by blockchain technology; so, blockchain is actually more than simply Bitcoin. Perhaps the most significant distinction between the Bitcoin and blockchain is adaptability. Bitcoin is rigid and focuses on cross-border transactions. Blockchain has been evolving continuously making its foray into other industries besides the crypto space. Bitcoin was designed with the aim of lowering transaction fees for cross-border money transfers. All transactions through blockchain are transparent and can be viewed by one and all.
Bitcoin is closed and prefers anonymity. Bitcoin trading is limited to the currency whereas blockchain has started to work with various other industries. So, Bitcoin has a limited scope unlike blockchain which is open to changes as it shows the willingness to be incorporated by other industries.
Bitcoin is less flexible also and aimed at cutting down time and costs of monetary transactions. But blockchain technology is adaptive and is able to cater to the needs of other industries too.
While Bitcoin focuses primarily on anonymity, blockchain focuses mainly on identity. Transactions in Bitcoins are private because the encryption makes it hard to identify the sender or receiver of funds. However, a blockchain network meant for businesses is dedicated to making all transactions viewable and accessible by all parties in order to boost operational efficiency.
Blockchain also has far more applications than the Bitcoin. It has potential advantages for healthcare, ecommerce, and a host of other industries.
Since the Bitcoin is a digital currency it is similar to the cash you have in banks and it enables peer-to-peer transfers. Blockchain, on the other hand, is a system wherein both parties will cooperate to streamline processes, making operations more secure and decentralized.
So, to sum up, blockchain is really a technology and comparing to a digital currency is not really fair. While their functions might overlap they are not the same. Their relationship could be compared to the relationship between robotics and Artificial Intelligence. While AI is a technology that is imperative for building robots, the AI technology is not a robot per se. The robot is designed to perform everyday activities and functions within a set of rules designed by AI. So, the robot’s functioning depends on AI technology; in the same way, Bitcoin’s functioning depends on the blockchain technology.