Cryptocurrency holds a huge prominence among different sections of the working and business classes. So, if you are the one who is still exploring the world of blockchain, and especially cryptocurrency, check the impact on bitcoin in international trade to ease your way. But are you confused with the association of blockchain and cryptocurrency?
If so, don’t panic. Do most traders stay confused with these two terms for a long time? Yes, many believe that they are 100% synonymous. So, in this article, we will go through a brief of cryptocurrency and blockchain to help you understand them better.
What is a Blockchain?
We are not hitting technicalities so that it becomes complex to understand them. So, to make it easy, we start with an example.
One of the most famous examples of cryptocurrency is Bitcoin. But, what, till now, were you confused with Bitcoin and blockchain also? This blog makes all three aspects of trading with crypto clear and valuable for you.
Let’s take the instance of bitcoin. A bitcoin block has different information, including the obvious ones you guess- who is the receiver, sender, and how many transferred bitcoins were there. So, this is the first block in the chain and is referred to as the Genesis Block.
It is not hard to imagine that different blocks exist that do other actions in the transactions. Thus, it should be connected to the previous one to have the blocks perform their functionalities smoothly. Therefore, blockchain technology is wholly called blockchain technology, hitting the basics of these interconnected chains with the functional blocks to make the process, data, and transactions work.
Was that difficult? No, right! So, the best way is to know that each block has varied information. All-in-all, combining these, this blockchain works like a massive digital ledger. Next comes the features of blockchain.
Unique features of blockchain
Primarily, there are four features associated with blockchain.
- The first one is decentralization. The fact that no one can manipulate, hack, cheat, or modify the functioning of the blockchain is unique.
- A distributed ledger comes with blockchain, and it counteracts the fraud and hack attempts for easier tracking and management of transactions.
- Coin minting is one of the most common scenarios associated with blockchain. So, to help you understand better, think of mining the bitcoins. It is a case of coin minting.
- Blockchain provides a tamper-free ecosystem. That means there is no way of trespassing through its processes and provides a highly stabilized and secure environment.
What is Cryptocurrency?
Indeed, it offers an entirely different story from the blockchain. You can think o it as an asset of blockchain. Certainly, in blockchain, where the part entirely is run by money is what cryptocurrency means. So let’s understand it better.
For instance, imagine the scenario- you want to exchange services or materials. So, naturally, you will be looking for some common monetary or exchange item that has value for you and the party selling the item to you. Cryptocurrency is that valuable item! It is a common asset for you as well as the second party. Indeed, it is clear that it runs on trust, and so is the reason for its price fluctuations while you see their trading graphs.
So, here is a one-liner that makes it possible to remember the difference between blockchain and cryptocurrency.
Blockchain is the bank, and cryptocurrencies are the currency that runs them!
Features of Cryptocurrencies
- These are irreversible. If you make a transaction, you will not receive the original value back in terms of crypto used.
- Most of the time, you will find them Pseudo-anonymous
- Cryptocurrencies offer secure and fast services. Imagine the transactions with bitcoin and altcoins.
- Market supply of all cryptocurrencies is in adherence to protocols and is strictly controlled. For instance, think like this- the number or amount of bitcoins is limited on this planet.
- There are no debts as the cryptocurrencies are based on IOU systems.
Conclusion
With a brief about blockchain as well as for cryptocurrencies, you can now go ahead to learn how it works. Indeed, with this attempt to explain with examples, we are sure that you will never get confused between the two terms again while trading or investing. So, join the best way to sell bitcoins and make money with the right insights.
Start trading today!
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