Difference between Blockchain and Bitcoin

bitcoin vs blockchain
Source: 101blockchains.com

Blockchain is one of the formidable names that frequently come up in many discussions on modern technology worldwide. However, the understanding of blockchain technology is often confused with that of Bitcoin. So, if you have used Blockchain as an alternative for Bitcoin or vice-versa, then you are not the first!

The Bitcoin vs. blockchain debate is common, as Bitcoin is the first popular implementation of blockchain. Most important of all, Bitcoin has monopolized the thought of people about blockchain technologies. After introducing blockchain as the underlying technology for Bitcoin in 2008, the bigger benefits of blockchain have achieved wide-spread recognition worldwide.

Now, it has expanded beyond the scope of cryptocurrency to emerge as one of the promising solutions for enterprise applications worldwide. The following discussion expands the understanding of blockchain vs. cryptocurrency, with an in-depth explanation of what both terms mean.

Blockchain

Blockchain technology is also applicable in various activities that do not depend necessarily on financial operations. However, the use of blockchain for maintaining a permanent record of multiple confirmed transactions creates ambiguities in Bitcoin vs. blockchain debates. Distributed and decentralized are the two terms that are primarily responsible for the confusion. They are the approaches for organization and maintenance of ledgers. In most cases, people confuse these elements as features of blockchain and Bitcoin.

In order to obtain clarity on the difference between blockchain and Bitcoin, it is important to assume examples of centralized ledgers. For example, bank’s records of ATM withdrawals or public records of home sales are centralized ledgers. In the cases of centralized ledgers, a single organization takes control of the ledger.

The bank or a government agency maintains a master copy of the ledger without any other official records. On the contrary, blockchain serves as a distributed system working as decentralized ledgers. Distribution implies allocation of multiple copies of the ledger to every party involved in a transaction, thereby decentralizing the control across multiple authorities.

Therefore, all users participating in a blockchain network maintain electronic copies of blockchain data, updated frequently with latest transactions. Users in the blockchain network are known as network nodes, and all of them participate in verification and validation of transactions. Most important of all, there is no specific authority controlling the process.

Cryptocurrency and Bitcoin

Crypto implies cryptographic techniques for securing economic system and ensuring the development of new cryptocurrency units. Bitcoin is the first known variant of cryptocurrency and is the frontrunner in Bitcoin vs. blockchain debates. The main idea underlying Bitcoin focused on creation of an independent, decentralized, and digital payment system, depending on cryptography and mathematical proof.

Many other variants of cryptocurrencies have emerged recently, each having their specific mechanisms and features. While some cryptocurrencies have their specific blockchain, some alternatives have been built over existing blockchains. On the other hand, some cryptocurrencies discovered their origins completely from scratch.

Applications

As a result, blockchain technology takes away the need for unwanted intermediaries. Blockchain provides a basis for a distributed ledger that delivers a reliable approach for data storage and access. On the other hand, Bitcoin applications aim at speeding up cross-border transactions with limited control of government over the transactions. Most important of all, it can also ensure simplification of the transactions without any third-party intermediaries.

Real-World Use Cases

The guiding principles of tailoring blockchain for businesses emphasized identity over anonymity, assets over cryptocurrency, and selective endorsement in place of proof of work. Some of the notable industries that have benefited from blockchain technology applications are logistics and supply chain management. Another prominent example of real-world use cases of blockchain technology refers to blockchain-based smart contracts.

Conclusion

On one hand, Bitcoin has a comparatively limited scope, with some governments skeptical about its adoption. On the contrary, blockchain has grown in popularity over the recent years, especially with the launch of many government-backed blockchain initiatives. In the long run, clarity regarding the difference between blockchain and Bitcoin would be crucial for capitalizing on potential of both.

101 Blockchains is the world’s leading online independent research-based network for Enterprise Blockchain Practitioners. https://101blockchains.com/