Did you know that blockchain and Bitcoin are not the same things? If you have used these words differently, you are not alone; many people do the same thing, probably because blockchain and Bitcoin are closely related.
What is Blockchain?
In simple terms, a blockchain is a computer file for storing data. Or, to put it in technical jargon, it is an open, distributed database (database), which means that the data contained within the blockchain is still distributed (duplicated) to all multiple computers and therefore enabled.
This power reduction is one of the factors that makes the blockchain so transformative. Unlike traditional, intermediate databases - where records are processed by a single central administrator (say, company or government) - the entire blockchain is transparent, and the data is verified with user consent. However, apart from this obvious, blockchains are surprisingly safe. That is because there is not a single point of attack that hackers can identify.
Shared. Broadcast. This sounds like Bitcoin…
You see! Blockchain is a technology that supports Bitcoin and was developed directly for Bitcoin. So, Bitcoin was the first example of an active blockchain, and without a blockchain, there would be no Bitcoin. That is why two words are often used interchangeably.
But that doesn't mean blockchain and Bitcoin are the same things.
Bitcoin is a medium-sized digital currency or a peer-to-peer payment system where users can transfer bitcoins anonymously without interference from a third party (such as a bank or government). Bitcoin is just one example of cryptocurrency; however, other cryptocurrency networks are also powered by blockchain technology. So even though Bitcoin uses blockchain technology to trade digital currency, the blockchain is more than just Bitcoin.
Looking at Comprehensive Blockchain Applications...
Because blockchain and Bitcoin are inseparably linked, it has taken people a long time to realize that blockchain actually has more extensive applications than cryptocurrency networks. In fact, the power of blockchain is so great that many people (myself included) believe that technology will change the way we do business, just as the internet did before it.
Here are a few examples of comprehensive blockchain applications beyond Bitcoin and other cryptocurrencies:
Making smart contracts.
Thanks to Bitcoin, we already know that the blockchain facilitates digital transactions, but it can also be used to make digital relationships more intelligent. With a smart contract, automatic payments can be issued once the contract terms have been met, which promises to save time and help reduce inconsistencies or resolve disputes.
Maintaining an integrated and transparent record system.
Blockchain is the ideal solution for maintaining a long-term, secure and transparent record of assets (land rights can be a good example) that all parties can access safely.
Procurement assessment.
Blockchain allows users to track asset ownership records all the way back to the source. As an example, Diamond company De Beers has started using the blockchain to track the diamond from the mine to the end buyer. Anyone who wants to make sure their diamonds are in good condition will have a clear and complete record.
Providing proof of insurance.
The national insurance company plans to use the blockchain to provide details of proof of insurance. The tool will help police, insurers, and clients ensure faster insurance coverage, which should help speed up the application process.
Some key Differences.
To conclude, let’s also learn why blockchain and Bitcoin are two completely different things:
• Bitcoin is a cryptocurrency, and the blockchain is a distributed database.
• Bitcoin is powered by blockchain technology, but blockchain has gained more use than Bitcoin.
• Bitcoin promotes anonymity, and blockchain is all about visibility. For use in certain fields (especially banking), the blockchain must meet the strict rules of Know Your Customer.
• Bitcoin transfers money between users, while blockchain can transfer all types of items, including information or intellectual property rights.
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