It seems these days that everyone’s talking about bitcoin. If you’re not living under a rock, you’ve surely heard the word bitcoin thrown around, most likely in tandem with another word — blockchain.
But what do these words mean? What’s the difference between bitcoin and blockchain? Can one exist without the other?
If you’ve found yourself asking these questions, you’ve come to the right place. This article will take you through blockchain vs bitcoin, and provide you with a brief introduction to both technologies.
What Is Bitcoin?
Bitcoin is a completely virtual, peer-to-peer currency, developed by an anonymous entity known as Satoshi Nakamoto. It was the first cryptocurrency, remains the most popular currency, and, to this day, people sometimes say “Bitcoin” when they really mean any cryptocurrency in general.
Since Bitcoin is completely virtual, there is no physical currency. While “Bitcoin” exists, physical “bitcoins” do not.
Part of the appeal from bitcoin comes from the fact that it does not need any government regulation to work. The fact that it’s a virtual currency means there aren’t any federal reserves or mints needed to produce it.
Every bitcoin interaction is assigned a complex cryptographic code. People — known as bitcoin miners — are paid to solve for these codes, and thereby ensure that every bitcoin transaction is legal.
Bitcoins’ price is constantly changing in regard to their market value. When it first came on the scene over ten years ago, one bitcoin was worth around nine cents. Now, one is worth close to fifty thousand dollars.
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What Is Blockchain?
Blockchain is the aforementioned technology by which bitcoin is verified. That’s right, that system that bitcoin miners use to make sure that each step of a bitcoin interaction is non-fraudulent — that is blockchain.
Blockchain was developed by Satoshi Nakamoto in tandem with Bitcoin. People quickly realized, however, that it can have many uses outside of the world of bitcoin. It’s essentially a “truth machine”, by which every step of any process can be verified.
Say, for instance, you’re in the diamond industry. To deal with the issue of blood diamonds, you start implementing blockchain. Every one of your workers — from those in the minds to those storing the diamonds, to those transporting them, to those cutting them, all need to input their step of the process into the chain — each step receives a serial number.
If something goes wrong in the process, you can easily trace the diamond by its serial number to the people who worked on it.
Blockchain can exist without bitcoin, but bitcoin cannot exist without blockchain.
Blockchain Vs. Bitcoin
The biggest key takeaway in the distinction of Blockchain vs Bitcoin is that blockchain is a system set up to make bitcoin work. Bitcoin is an online currency, whereas blockchain is a way of doing things.
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