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Difference between Blockchain and Bitcoin Technology

Difference between Blockchain and Bitcoin Technology

For people who are new to cryptocurrencies, and they do not have complete knowledge about this sector, the word blockchain and bitcoin technology seem similar.

But, both these terms are pretty different. Some people refer to bitcoin when talking about blockchain technology, while some refer to blockchain technology when talking about bitcoins.

If you are thinking about investing in cryptocurrencies and bitcoins, it is essential to know about these technologies.

In this article, we will get details about the difference between bitcoin technology and blockchain.

Concept of Blockchain

Blockchain technology is described as a decentralized and distributed ledger. In simple words, blockchain technology is a digital ledger similar to the public ledger, but it is an electronic version of the paper ledger. This digital ledger system of blockchain helps in recording a list of transactions.

Blockchain technology is a linear chain, including multiple connected and secured blocks, by using cryptographic proofs. Since you understand blockchain technology in the context of financial transactions, this does not mean that it can’t be used in other sectors. Different sectors and businesses are responsible for recording transactions through bitcoins.

The blockchain is like a chain that consists of different blocks. These blocks are connected through cryptographic proofs. In cryptocurrencies, the blockchain technology is responsible for keeping a permanent record of all types of confirmed transactions.

The terms distributed and decentralized refers to how the ledger is structured and maintained. You can understand the concept of decentralization in terms of blockchain by taking an example of a bank or a government organization. The traditional ledgers used in a bank or a government organization are centralized because they are maintained by one single entity that relies on an available database.

On the other hand, blockchain technology is built as a distributed ledger. This means that there is not a single copy of the under this technology catalog, and no central authority is present that can control the ledger. Every user who tries to join and participate in maintaining blockchain keeps an electronic copy of the blockchain data. All these decentralized ledgers are maintained by everyone who has access to this ledger. Thus, every user on the network is involved in the process of maintaining the blockchain.

In simple words, blockchain technology is a kind of distributed system maintained by the collective functioning of users who are spread worldwide.

Concept of bitcoin

Bitcoin is a type of cryptocurrency that was developed in the year 2009. This is known to be the first cryptocurrency ever created. Bitcoin is used in different transactions worldwide, and it is one of the most used cryptocurrencies all around the world. The main idea and functioning behind bitcoin are to create an independent and decentralized electronic payment system that can work on the system of cryptography.

Although bitcoin is one of the most known cryptocurrencies, it is not the only one. Different other cryptocurrencies have been formed on the same protocol as bitcoin. Like most cryptocurrencies, bitcoin was formed as per the protocols of blockchain technology. There is, limited supply of bitcoin and only 21 million bitcoins are available to be mined. The bitcoin protocol works on the open-source model, and the total supply of the bitcoin is available on the public platforms. Anyone can easily review and copy the code used in bitcoin. Many developers all around the world are contributing to the development of the code. You can refer online to know details on this.

Thus, if you think that bitcoins and blockchain technology are the same, you are mistaken. Both of these terms are different, and if you want to invest in any of these technologies, you need to have a clear-cut understanding between these terms. Bitcoin is a digital currency that can be used for several transactions. On the other hand, blockchain is the technology that helps run bitcoin. We hope this article will help you understand the basic difference between these terms; you can refer to different platforms to bitcoinboom. app. These websites will give you complete details on bitcoin. The most important thing is you have to make sure to choose only a reliable website to do any investment.

Also Read: Blockchain – How Is It Applied To Digital Marketing

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