Crypto And Blockchain Simplify

Hello! Friends,

This day, many people are confused about blockchain and cryptocurrency. Some say, the two are the same but I came to tell you that they are two different things. Take a moment to follow this my review about the two.

_{Pixabay: Blockchain Technology}

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There is the key difference between blockchain technology and cryptocurrency, listen this review is not a bit of financial advice but rather releasing a piece of information you can leverage upon when people start talking about cryptocurrency and blockchain as the same thing.

First, what is Blockchain?

If you are an accountant you will understand the word ledger. When you consider what blockchain is to this digital world, is a fully transparent and continuously updated record of the exchange of information. This exchange of information will need to pass through a medium and this medium is a network of your personal computers. This simple explanation made blockchain a decentralized system which is very difficult for anyone to hack single-handedly and this resolved to what we called a trustworthy system.

You asked, how are all this piece of information from a network are recorded?

Well, blockchain network makes use of cryptography to record every transaction in what we called blocks and make sure that this cannot be corrupted or altered. This simple operation makes everyone within the system track down the information on every exchange even without accessing the personal account of users.

Now take a little stress and reason along with me, consoder blockchain technology as operating software, like Windows or MacOS that would make a cryptocurrency serve like one of many applications which can run on that network. You need to know that this simple statement shows that without blockchain technology there will be no cryptocurrencies.

The underlying network that allows cryptocurrencies to exist is called Blockchain. The technology side of blockchain is the potential it has to improve all kinds of industries which are outside finance.

Now, What Is Crypto?

Following your understanding about blockchain and its technology, cryptocurrencies are limited entries in a database and come with no alteration without fulfilling specific conditions. This simple means until crypto fulfill a condition there is no change. That is the mind behind every currency.

The simple definition of a cryptocurrency comes with one action which is Work. Crypto is a virtual or digital currency which function is to Work as a path for exchange. Like I mentioned when explaining blockchain technology, crypto also uses cryptography to verify and secure its transaction. Cryptography security and verification ability crypto use also bring about control of the creation of the new units of a particular crypto.

Let's Consider There Relationship

The first point that covers all is, all cryptocurrencies are run on blockchain technology. Every transaction of crypto completed is done a blockchain and this show that without blockchain there is no means for transactions to be recorded and transferred.

With clear differences in crypto and blockchain, they both have the potential to work well with each other. Have you considered the mind behind ICOs? Initial Coin Offerings is one of the convenient ways to reward every user of a particular blockchain and it is cryptocurrencies that offers this. ICOs are used to raise fund for new projects and tokens were distributed to finance such projects and also pay users of a blockchain to boost up their moral towards the project.
There are more relationship crypto and blockchain have together but I will stop with this.

What Are The Differences

From the similarities, we understand that ICOs connect cryptocurrency to the blockchain but I did not stress out what separates them from each other.
Knowing that Blockchain brings in crypto and also serve as a technology of distributed ledger which forms the network, crypto is just a token used within these networks to send value and pay for these transactions. Transactions of communicating with friends, a colleague within the blockchain are paid for. We can also say, crypto is like a tool just like you have a screwdriver in a toolbox so is crypto is on the blockchain and its function is to serve a purpose or utility function. The digitilizing of asset value is the major function of cryptocurrency.

To conclude, cryptocurrency is never a blockchain but many use the entity interchangeably. We now have the understanding that these entities are different but work hand in hand.